Evening Star Newspaper, November 23, 1931, Page 14

—14 ¥x¥ CENTRAL BANKING | CONTROL IS URGED Business Magazine Suggests | Unified System as Remedy 1 for Credit llls. Special Dispatch to The Star. NEW YORK, N. Y., November 23.— The first and fundamental step in strengthening our banking structure is to centralize control over general credit conditions in the Federal Reserve System by requiring membership in it of all banks of deposit engaged in any form of interstate financial transac- tions, says the leading editorial in the current issue of the Business Week. This would make it practically in- clusive of all banking institutions of any importance, since the clearing and collection of checks, by which at least 90 per cent of all business is done, in- evitably involves every institution in some degree in banking transactions across State lines. 1 The interstate commerce clause of the Constitution provides ample au- thority for such exercise of congres- sional power; but if this were not con- sidered sufficient the constitutional au- thority conferred on Congress to regu- late the currency certainly would be s0, since deposit currency has almost wholly superseded ordinary currency in our modern business system and this is not now subject to any Federal regu- lation save as the Federal Reserve @u- thorities exercise it over their member banks under the Reserveact and the national bank act. Suitable changes | can be made in the capifal subscrip- tion requirements to facilitate member- ship, and at the same time these may serve as a convenient means of elimi- nating some of the weaker or unneces- sary institutions from the system. Minimum Standards. There is no escape from such Federal regulation of what has become the ac- tual medium of exchange if we are to secure any stability in our monetary and credit system. The only alterna- tive would be outright governmental banking, for which this country is cer- tainly not prepared. In any case it 1s practically impossible to assure pro- tection of bank depositors and provide adeuate, elastic credit facilities for in- dustry and trade without such centrall- zation of control in the Reserve system. The chaotic and uncontrollable situa- tion that has resulted from the ex- istence of a national banking system alongside a system of State member and non-member banks, the diversity of standards of bank regulation in the States, and the competitive discrimina- tions that arise from these regulations have become an unendurable handicap to stable business progress. Certain minimum standards of banking prac- tice uniformly applied throughout the entire commercial banking system of this country are essential to maintain iblic confidence and provide con- g:uous credit facilities. As Owen Young said last vear in recommending to Congress this prin- ciple of compulsory unification of our banking system, the line “member of the Federal Reserve System” on a bank window must be made to mean some- thing. It hasn’t meant as much as it shqud largely because so large a part of our banking resources has been out- side the influence of the Reserve sys- tem, so that the system itself has been unable to exercise effective control over general credit conditions and banking practices in the face of which the member banks themselves have been almost helpless. Any one who under- stands the part played by banking policies in this depression will realize that bank failures are more than a matter of individual bank management, important as this is. During deflation periods the utmost that bank manage- ment is able to do is to convert its institution into a safe-deposit box. But this also is a bank “failure.” Appeal for Unification. After all, the ultimate appeal for unification of our banking system and centralized control of basic credit con- ditions lies in the fact that credit is a public utility quite as important to the stability and security of modern eco- nomic soclety as is the continuous sup- ply of electric energy, water, or trans- portation. While it should be left to private enterprise to provide, until such enterprise proves incapable of doing 80, there must be some measure of -ef- !e::lvet control over it in the social rest. Brokers’ Comment NEW YORK, November 23.—Some stock market commentators today found the outlook rather gloomy, although the larger short interest was stressed by those who look for a technical turn on the appearance of favorable news. Thomson & McKinnon—Refusal of the heads of the railway labpr unions to accept a wage reduction is\a disap- intment. It was hoped that the labor leaders would sce their way clear to accede to the railroads’ request, thereby avoided a long-drawn-out issue otherwise likely by compelling the rail- roads to proceed in accordance with the transportation act. Prazier Jelke & Co.—Judging wholly by the recent behavior of stocks, the immediate market outlook is mnot promising. It should be recognized, however, .that the short interest prob- ably has increased materially during the past two weeks and that stocks are declining fully as much because of lack of buying power 2s because of the volume of liquidation. Shields & Co.—Wnhile the worry over European conditions threatens to main- tain a rather definite downward price trend, news that is given a bullish in- terpretation can have momentary in- fluence. Only spasmodic flurries of this kind are expected for the near future, ‘Thowever, and they will be too dangerous to follow. Jackson Bros., Boesel & Co.—As we view the situation, the stock market, both with respect to industrials and rails, is now in good technical position and harbors a short interest which is quite large in relation to floating supply. Appearance of any constructive piece of news of major importance, we believe, ‘would bring about a sharp rally. ‘Hornblower & Weeks—We feel that eurrent developments have, to a con- siderable extent, been alrcady discount- ed and that prospects of an early solu- tion of the uncertain situations which have been overhanging the market ‘warrant a policy of gradual accumuia- § tion of issues in a favorzble position to | benefit on any appearance of improv- ing business conditions. RUSSIAN GRAIN SOWING | REPORTED ON INCREASE By the Associated Press. Russia’s Fall grain sowing campaign ~—watched closely by world market ©Observers—has taken on new life. After dragging for several weeks & spurt reported to the Agricultural De- rtment has brought the total plant- mgs to 92,423,000 acres, 87 per cent of the Soviet’s plan and 92 per cent of last year's sown acreage. Tre season is getting late, however, says the report, and a slight reduction from the 1930 sowings seems certain. World wheat production in north continent countries reporting to date amounts to 3,114,412,000 bushels, a drop of 73,000,000 from the production of the same countries last year. FINANCIALS THE EVENING STAR, WASHINGTON, \ D. C., MONDAY, NEW YORK STOCK EXCHANGE Received by Private Wire Direct to The Star Office. (Continued From Page Bales— Add 00. 8 = ~—1931— Stock and Low. Dividend Rate. 29% Pacific Gas & El (2). 35 Pacific Lighting (3). 914 Pacific Mills oo 100% Pacific Tel&Teleg(7) % 4 Packard Motor (40c) 10% (b10% stk). % h cisen 1% % 4 - 2 Peerless Motor Car.. Penick & Ford(11%) Penney (J C) (2.40).. Penna Raliroad (2).. Peoples Gas(Chi) (8) Pere Marquette Ry.. Pere Marquette pf. .. Pere Marquette pr pf Pet Corp of Am (1).. Phelps Dodge Co.... Phila&Reading C & 1 Phillips-Jones pt (7) Philip Morris&Co(1) 4% Phillips Petroleum. . 514 Pierce Ofl of.. 74 Plerce Petroleum 20% Pillsbury Flour (2 Pitts Steel pf Pitts Termin: Pittsbgh Unit pt(7 Poor & Co (B). . Port Ric Am Tob Postal Tel&Cable pf. Prairie Oil & Ga: Prairie Pipe Lin Proct & Gamb (2.40), Public Sve NJ(3.40) . Public Sve NJ pf (6). Pub Sve G&E pf (5) Pullman Corp (3) 22 2814 26% 129 13 134% 18% 4% [ 8% 3719 9 5 6414 Pure Oil pf (8). 12% Purity Bak: 814 Kadio Corp. . Radio Corp pf A 3%. Radio Corp (B) (5).. Radio-Keith-Orph A Raybestos Man (1.60) Reading RwYy (4).... 4 Real Silk Hoslery Remington-Rand.. .. Reo Motor Car(40¢) 4 Republic Stesl...... Republic Steel pf...y Reynolds Tob A (3). 3515 Reynolds Tob B (3) 7 Richfield O11 2% Rio Grande Of 9 Rossia Insur (2. 13% Royal Dutch of N 12 Rutland-RR pf. 38% Safeway Stores (5) .. 75 Safeway Strs pf (6). 87% Safeway Strs pf (7). 9% St Joseph Lead (1).. 614 StL-San Francisco. . 7%4 StL-San Fran pf(6).. 4 Schulte Retail Storea % Seaboard Air Line 5% Seaboard Oll 31 Sears Roebuc! 1% Second Natl Inv. 3% Servel Inc. ... B 4 Sharon Steel Hoop. . 3% Sharp & Dohme. . 10% Shattuck(FG)(t1%) 9% Shell Trading & Tran 3y Shell Unon Ol... 23% Shell Union Ol f.. 814 Simmons Co.... 5% Sinclair Consol Oll. . 8% Skelly Oil...... 2 Snider Packing pf... 12% Socony-Vacuum (1)« 7" South Port Rico Sug. 28% Southn Cal Ed (2)... 381 Southern Pacific (4). 121 Southern Rwy (m$) 18% Southern Ry pf (5! 18 Spalding (AG) (1 1% Spear & Co. . 9 Spencer Kellog 3 31 Splegel-May-Stern, . 12% Stand Brands (1.30). 29 Stand Gas&El (3%). 4215 Stand Gas&El pt (4). % Stand Invest Corp. .. 281 Stand Ofl of Cal(2%) 8815 Stand Oil Exp pf (5). 8y Stand Oil of Kansas., 28 Stand Ofl NJ (13)... 1 Sterling Secur (A).. 4% Stewart Warner. 13% Stone&Webster (m2), 9 Studebaker Co(1.30). 274 55 60 241 29 971y 307 19% 104 26% 54 31% 6915 97% 108' 30% 62% 6 1% 1% 20% 63% 6l 1% o N o e BorTrnondanlunSEaaRarnoniSanann o e 3 o =T 18 High. 374 3 1015y 10% 108 13.) —1931— Heh Low. Net. Low. Close. Chy 36% 36% — 4214 424 62 21 914 1 2% Tenne % 1084 108% 5 5 1% Y 1% H 13 18 35 19% Timken 2 27% 11% 8715 6313 181 124 644 1% 10% 35% 36 U S Lea U S Lea U S Lea Us (SEEE 00 % | ® FEE F FFEF FF FF 4 1% 41% LE+l+ 24 31 1+1 3% 71% 26 27% 2 3% Warn B 1 rner 46% 5 rren 6 26% 12% Wesson 61 16 75% Wsthse 6% Weston 4215 20 30 15% 29 78 13 19 Ygstwn +1+ 1% | 10:30 A, 1:30 P.M. .o % | Dividend rates XEx-dividend. TPlus 9 b Pavable in stock. e hPlus 2% in stock. 3% in ‘stoc] stock. p Pl PUbr+r+00 0+ k. *m us 275 % i Stock and Dividend Rate. 118% 99 Studebaker pf (7)... Symington (A)..... 12% Telautograph (1.40). 1% Tobacco Products. 3% Transamerica Corp.. 3 Tri-Contl Corp. . 24% Trico Products(2%) Truax Traer Coal Co Ulen & Co 23% Underwi Union Carb & (2.60).. Unilon 01l of Cal (2). Union Pacific (10). Union Pacific pf (4 Un Tank Car (1.60).. Cnit Alreraft. . 5 Unit Am Bosch Unit Carbon. Unit Cigar Store Unit Corp (76¢) Unit Corp pf (3). Unit Dyewood pf (7) Unit Electric Coal. Unit Fruit (3). Unit Gas&Im(1.30) Unit Plece D W (2) U S Hoftman.... U S Indus Alcohol. ipe & Fdry (2). 4 US Realty & Imp.... U S Rubbe U S Rubber 1st of. .. U S Smtg & Ref (1) U S Smtg&Ref pf 3% 4 U S Steel Corpn (4) U S Steel pf (7).. United Stores (A)... 15% Univ Leaf Tob (3).. 92% Unlv Leaf Tob pf(8) Univ Pic 18t pf (8 1% Univ Plpe & Rad. 8 Utll PEL(A) e12.16 147 _Zonite Prod Corp (1) % Elec Po&Lt ..Dec 4 Sales of Stocks on New York Exchange. s | payments based on the sLess thar % in Stock. Net. Chge. -% Sales— Add 00. High. Low. Close. 10s 99 99 99 1% 1% 14 00 Corpn 15 Texas Corp (2).... 20% Tex Gulf Sulphur(3) 215 Tex Pacific Coal&Oil. 4% Tes Pacific Land Tr. Thatcher Mfg Co Thermold Co. Third Nat Inv(m55c) 113 Thompson Starrett. . Thomp-; 3'3 Tide Water Asso Oil. 20'% Tide Water Tide Wat O1l pf (5).. Star pf (3%) pr(6). Roller B(2. 00d-EI11-F (3) = - a 5 E 5 mrafannRanee~RenBe-FTalsnn3amAalan cnaanne s mm e o ther. .. ther (A). th pr pf (1) a 2 2w 33 P 2 14 Vadasco Sales Cor, 76% 18% Vanadium Corp. 3 14 Va-Cora Chem. 32 Vulcan Detin (4 5% Wabash RR........ 17% Waldorf Sys (1%4) . 21 Walworth Co. . Ward Baking (B) ros Plcture: Quinlan. Bros. . 5 Webster Eisenlohr. Oi1&Sno(2). ‘West Pa El pf (6) 10015 West Pa Pwr pf (7). 5% Western Maryland. 314 Western Pacific 527 Western Union ( Westinghse A B(: 36% Westinghouse ( EM 15t m3% Elec Instru. 8% Westvaco Chlor 1.60. 1's White Sewing Mach. 18 Willys-Overland. 5 Wilson & C. Woolworth (14.40) % Worthington Pump 80% 50% Wrigley (Wm) (4).. 12% Yale & Towne (2). 3% Yellow Truck Young Spr& Wire(2) Sheet&Tube. 11 RIGHTS—EXPIRE. 24 W W . 200,000 1 .1,000,000 2: .M. iven in the above table [ are the annusi cash Iatest Guarterly or half-yearly declarations. n 100 _shares. tPartly extra. tPlus I o a :lld last year—no reguiar rate. 'ayable in cash or stock. fPlus 8% in stock. VBlis S0c in special preferred stock. k Biis Faid this year—no resular rate. DFIUs 8% in n stocl Everybody’s Business Great Britain's Imposition of 50 Per Cent Ad Valorem Duty on Imports Not Expected to Cripple U. S. Trade. BY DR. MAX WINKLER. Special Dispatch to The Star. NEW YORK, November 23.—The in- troduction by Great Britain of a 50 per cent ad valorem duty on goods imported into that country is not expected to have as adverse an effect upon Ameri- can manufactures as was generally ex- pected when this duty was first sug- gested. To begin with, goods coming within Great Britain's latest ruling constitute only a very small percentage of Amer- ica’s total sales. For the current year they are not likely to be much in ex- cess of $15,000,000. In 1929 they were valued by the United States Depart- ment of Commerce at $18,600,000, out of a total of $848,000,000 exported from the United States to Great Britain during the year. The principal items affected are typewriters and typewriter parts, paper manufactures, silk hosiery (on which there is already a high tariff) and tools. A somewhat pessimistic view is ex- pressed by Oren P. Gallup of the Ex- port Managers' Club, who holds that Great Britain's new tariff will have a very serious effect upon American ex- ports to that country. The difference in exchange, Mr. Gallup continues, has already added 20 per cent, which, with the results of the anti-dumping bill, will make prices so high that they will amount almost to an embargo in some items. While this is true, it should be re- membered that the aggregate amount is 50 small as to render almost negligible the effects of the bill as it stands today upon the economic structure of the United States. The great bulk of United States exports to Great Britain com- prises raw materials and foodstuffs which England needs. It is therefore felt that these large groups will not be affected by any general tariff action by Great Britain. Sees Benefit in Tariff. ‘When all the countries with which Great, Britain trades have raised their tariffs, it will be impossible for Great Britain to remain a free trade coun- try, in the opinion of P. Ashley Cooper, | governor of the Hudson Bay Co. Although personally opposed to pro- tective measures, Mr. Cooper feels that the emergency tariff adopted by Great Britain will improve conditions, adding that the constant raising of tariff walls, resulting in a breakdown in the free exchange of commodities, has been one of the most important factors con- t§ibuun¢ to unemployment and depres- sion. Another factor which tends seriously to upset the free movement of goods, in opinion of Mr. Cooper, is the problem of reparations which - sents a one-sided transaction that was bound to have a most adverse effect upon world commerce, Mr. Cooper might have added that due to the admitted one-sidedness of the reparations problem, a real under- standing between nations is very diffi- cult, because there can be no real un- derstanding if only cne of the parties understands. There is no doubt that the serious- European nations thus far included have @ harvest 37,000,000 bushels of ness of the situation is now being real- ized by all, and that attempts will be ‘made to bring about a permanent solu- tion of a problem which, for almost & decade and a half, has been one of the principal impediments to & genuine WASHINGTON STOCK EXCHANGE SALES. Washington Gas 55—$1,000 at 100%4. Washington Gas 6s “B"—$100 at 102!;. Mergenthaler Linotype—2 at 63. Bid and Asked Prices. BONDS. PUBLIC UTILITY. :mer '{!l. & Tel. 4'%s '3 m. Tel & Tel. ctl. tr. Anacostia & Pot. R. R. Ana. & Pot. G C. & P. Tel. of Capital Traction City & Suburban Bid. Asked. a A 55. 55 R. R. 5 55, 1s Cons. 95: : lex. & Mt. Vernon cif. n' Gas 4! Washington Gas Wash. Gas 6s, Wash. Gas 6s, series B.. Wash. Rwy. & Elec. 4s.. MISCELLANEOUS. | Barber & Ross, Inc., 6Y%s... Chevy Chase Club 5'as.. Columbia Country Club 8’ . C. Paper MIg. 6S..... Wash. Mkt. Cold Storage 5s.. PUBLIC UTILITY. Amer. Tel. & Tel. (9).. Capital ‘Traction Co. (4 s, pId... c. Power 512, DId & El. com. (1) . & EL ptd. (5). NATIONAL BANK. gapital G, Columbia (137 Bietrict (. Feo Amer, Natl! Bk & 'Tv. Lincoln (107" Metropolitan Riggs_(155). QUOTATIONS AND DAY’S SALES Second (9e) ... Washington (13). TRUST COMPANY. Amer. Sec. & Tr. Co. (15). Continental Trust (6).. Natl. Sav. & Tr. (121). Prince Georges Bk. & Tr. Union Trust (8s). : Wash. Loan & Trust (14) SAVINGS BANK. of Bethesda (6)) ). : c. Bav. & Com. BK. (i1} Beventh_Street (12) United States (30) Wash. Mechanics (20} FIRE INSURANCE. American (12) Corcoran (10) Firemen's (8)..) " National Union (i} .] TITLE INSURANCE. | Columbia (6n).... e Real Estate (6h). MISCELLANEOUS. Medical Bl Sand & Gi Col. | Col! 0-Selz, ‘A" "(3). Federal Storage pfd. (8) Fed.-Am, . (1.201 Fed.-Am_ Co. pfd.’ (6). Lanston Monotype (6). Tr. & Stge. com. (16} Stge. i . Mech. Mtge. B Ress Wash. Med. Bidg. Corp. (7). " 90 Woodward & Lothrop com. (1.20) 31 Woodward & Lothrop pfd. (7).. 107 *Ex. dividend. 52% extra. bBooks closed. ¥212% extra, 25¢ ext 37 extra, Xtri 3 ella% extra. rehabilitation of the world from the | ravages of the great war. ‘Weakness in Rails. In some quarters, renewed weakness in rails is attributed to the failure on the part of railway executives to put through any definite measures in re- gard to wages of the railroad employes. It was felt that the conference be- tween executives and the union brother- hoods would be devoted strictly to the matter of a 10 per cent voluntary re- duction in Y’ 5. Instead, an unetl:(‘-l h?ment rel program was presen! En the suggestion made that a re- serve fund should be created by the carriers, appropriating surplus earnings in good times up to an amount esti- | mated as necessary to maintain earn- ings of employes during periods of de- pression. As to the wage question, the union called attention to the fact that 400,- 000 railway workers were earning less than $20 a week, and that another 600,- 000 were making less than $30 weekly, which is indicative of the difficulties in connection with attempts to effect 'wage reductions. Bond Interest in Doubt. e due on €] ) 6% and 7 per cent bonds held by American investors to the amounts of about $8,527,000 and $2,700,000, re- y. Ju by latest reports emanating from Golombia, the bonds may be per- mitted to default, thus adding one more to the rapidly growing list of | Latin American borrcwers who call |upon their foreign creditors to forego interest on their investments. If Medellin should default, it may reasonably be expected to be followed by other Colombian municipalities. De- partments and mortagage institutions may also find it convenient to follow suit. ‘Whether the government will be able to_continue to meet the service on its wmmbum.* would seem to indicate that payment might be suspended even on govern- mental issues. Other Colombian bonds, interest on which is due December 1, include the Department of Cauca Val- ley and the city of Barranquilla (four issues). Motor Trade Optimist. E. L. Cord, president of the Cord Corporation and the Auburn Automo- bile Co., is, as might have been ex- pected, optimistic on the moter in- dustry. ‘The future for the automobile busi- ness is what it has always been, says Mr, Cord. The public’s need for auto- motive transportation constantly in- creases. Therefore, companies that are able to produce newer, better built cars, that offer greater value for less cost, will enjoy an ever-increasing public patronage. Commenting on his own company, Mr. Cord states that its plans for the future are based on the possibility that the automobile business may have a smaller total volume to share next year than this, and that Auburn’s plans are to meet that kind of a market. Pennsylvania’s Stock. Selling around $28 a share, or 56 per cent of par, the Pennsylvania Railroad stock is registering quotations which have not been witnessed in almost two generations. In the year of the Pittsburgh riots, about 54 years ago, the common stock of the Pennsylvania Railroad sold at 24%. At that time all freight traffic in the Pittsburgh area was suspended for 10 days, resulting in material losses in the road’s revenues. Present levels are slightly in excess of one-quarter of the record high of 110, which was established in 1929. On the basis of the new rates of $2 a share, the yield at current levels is somewhat above 7 per cent, which is rather th when compared with the current yleld on other carriers. (Copyrisht, 1931 by ewspaper North American ce, 3a6.) BONDS DEPRESSED | (oee =one B Recetved by Private IN AGTIVE TRADING Lower Opening Is Followed by Renewed Selling of Rails. BY F. H. RICHARDSON. Special Dispatch to The Star. NEW YORK, November 23.—With very few exceptions listed bonds de- ;:uned today in moderately active trad- ng. The market opened lower, in com- pany with stock prices. Rallroad bonds were heavy as a result of the refusal of the railroad unions to accept a wage cut. There was an element in Wall Street, however, that leaned to the be- lief that the rejection of a wage reduc- tion has clarified the situation and that something concrete might now be ex- pected from the Interstate Commerce Commission. As a result the declines in the rail list were generally held within con- servative limits. Losses ranged from !, to 1 point in Rock Island refunding 4s, Illinois Central 4%s, Frisco 41is, St. Paul 5s, Alleghany 55 and Chicago & Eastern Illinois 5s. Nickel Plate 4l,s and 6s dropped 2 points. The latier road's net income for the first 10 months of 1931 was equal to $1.12 a share of 6 per cent preferred against $327 per share of common in 1930. Pere Marquette bonds were heavy, as the road reported a reduction in 10 months’ net_income from $4,463,713 in 1930 to $1,135,265 this vear. High-grade railroad bonds, such as Atchison General 4s and Union Pacific first 4s, were lower with prime utilities like American Telephone 5s and Con- solidated Gas 5125. United States Gov- ernments were off 35 to 1 point and there was also an easing in high-grade municipals. The market for these de- scriptions was disturbed by reports that the United States Treasury plans to sell $1,000,000,000 of long-term bonds in December to meet maturing notes and certificates. Market opinion is that such an amount of bonds could not be distributed at less than a 3% per cent rate for 10-year bonds. Consequently there was a tendency to sell outstand- ing long-term Treasuries. Canadian bonds were fractionally lower in most cases, reflecting a 12 per cent discount for Canadian exchange and the competitive pressure of the Ca- nadian government's offering today of $150,000,000 in 5 and 10 year 5s priced to yield 5.13 to 5.17 per cent. The bonds were reported moving out quickly, with many American corporations and indi- viduals purchasing them with American currency in order to take advantage of the fat yields—6.81 to 8.15 per cent— available at New York prices. These purchases, of course, presuppose the 's | return to parity of the Canadian dollar. Germany’s new economy plan, which involves the reduction of wages and prices in Germany, was not particular- ly well recelved. German 5!;s and Dawes reparations 7s were both lower. So were German Central Bank Issues and German municipals. Wall Street felt that the opposition of Labor Un- ions and politicians might cause a new crisis in Germany. Japanese bonds were 1 to 3 points lower, in spite of the fact that hope- ful reports were still emanating from Paris, Washington and Geneva with respect to the Manchurian situation. South Americans were little changed. Bonds were lower in fairly active trading at the opening. A weaker stock market and the failure of the rail- roads to come to a wage agreement with employes caused selling of bonds. Issues like Erie 5s, Nickel Plate 415s, Frisco 4135 and Illinois Central 43s were off from ; to 1 point. Industrials also were lower, with small losses in Youngs- town Sheet & Tube 5s, Inland Steel 4Y,s, Standard Oil of New Jorsey Is and General Motors Acceptance 6s. Prime utilities such as American Tel- ephone 5s were firm. Foreign dollar bonds were inclined to sag. Japan 6l.s lost a point, as did German Central Bank issues. South Americans were little changed. Buying a Bond BY GEORGE T. HUGHES. One of the qualifications for a sound bond investment is a balanced capital structure of the debtor corporation. ‘This essential is recognized in the New York State law governing savings bank investments in the requirement that every public utility corporation, the bonds of which are held by such insti- tutions, must have outstanding full paid capital stock equal to at least two- thirds of the total debt secured by mortgage llen on any part or all of its property. ‘The reason for this provision is that the partners in the enterprise ought to furnish their share of the capital, as- suming the risk of partnership and not relying in disproportionate amounts on borrowed funds. Other things being equal, the larger the stockholders' equity the stronger the position of the bondholder. When earnings fall off in times of trade de- pression the margin of safety for bond interest decreases more rapidly in the case of a corporation with a large funded debt and a small capital stock than it does when the reverse situation exists. Of course, the proportion of two- thirds fixed by the New York law is an arbitrary one. If capital stock is equal to or is greater thant the mortgage debt, so much the better. To take an illustration from the industrial fleld, one of the strongest bond obligations in which there is any public interest is the 315 per cent debenture issue of the General Electric Co. The market price alone is sufficient’ proof of the quality. General Electric carries on its balance sheet 28,845,928 shares of no-par com- mon stock at a valuation of $180,287,- nt st al r value of $42,926,930. i Now the only funded debt of the company is the 3'5 per cent debentures and they are outstanding in the neg- ligible amount of $2,047,000. Of course, such situations are rare.. If the com- pany has any funded debt at all, it is almost sure to be in greater ratio to the stock than with General Electric, but the illustration makes the point. The lesson for the individual in- vestor is to look carefully into this ratio before he makes a commitment in a bond of any kind, utility or in- dustrial. (Copyrisht, 1931.) - Capital Stock Reduoced. NEW . YORK, November 23 (#)— UNITED L1st 4%s32-47 L 4th 43%s 33-38208 Abitibl P&P 5s°53. Alleghany Ci Allegheny & Am IGChb%s 49, Am Intl 5% . Am N Gas 6%s '42. Am Sug Ref 63'37.. Am T&T cv 4%3s'39 Am T & T 68°65. ... Am T&T c tr 6s '46. Am T&T 638 1 '60 Am T&T 5%s'43. . NOVEMBER 23, 1931. STATES. 100 30 100 22 1016 1013 94 8 94 1 104 19 10413 Bales. Hich. Low. 2.55 8 45% 45 45 45'5 45 3713 2 Am Wat Wks 6s'75 Arpentine 548 62.. Argentine May '61. Argentine 6s Ju'59. Argentine 6s Oc'59. Argentine 6s A '67.. Argentine 6s B '58., Arm & Co 4%s'39.. Atchison gn 489! Atchiscv 4%8°48.. AU CL 1st 4s’52... Atl Ref db 58°37, Australia 4 41 B&O Swdv b8 '50. B & O Toledo 45’69 Bk Chile 6% 1’61 Belgium 65 '56. Belglum 6343 Belgium 7 Belgium 7 B Ind Loan C Bell Tel Pa 53 Berlin Cy E Beth Stl pm . Beth Stlrf 5345 '42. Bolivia 7s Bolivia 7s Bolivia 8s Bordeaux Brazil 85 ‘41 Bremen 78°35 Bd & 7th Av 55 '43., Bklyn Elev 6% % BR&PIitt 4%s Calit Packing 6 Canada ¢s ‘60 Canada 4%s'36. Canada §s ‘62 Can Nat Ry 43 Can Nat 4385’ Can Nat 433 '6i Can Nat 53 July’ Can Nat 55 Oct Can Nat 68'70. Can Nor 6%s db *4 Can Nor 78 db 40 Can Pac db 4s. Can Pacific 435 46 Can Pac 58 '44. Can Pac 58 '54. Car Clin & O 55°38. Car Clin & O 65 '52. Cent )11 GRE 58'51. Cent Pac 53'60. ... Cen Ry NJ g 6887, Cert-td db 5348 "43., Ches Corp 58°47. ..o, C&Ogen4%aaz., C&O 4%sA'93 Chi & Alt 3s. CB&Q4%s8'T7. CB&Q I1dv3%45'49 Chi & Est I11 55" Chi Grt West Chi M &St P C M StP&P 5875 Chi&NW 4%s 2037, C&NW 4335 C 2037, Chi& NW cn ¢%s. Shi & NW 6%s°36.. Chi Rwys 58 ‘27..... Chi RI& Prf 48'34 Chi RIcv 4% Chile 78 *42. Chile Cop db s Christiana 6s CinUnTrust 5s 20: CCC&St L 4%s Clev Term 4%s The authorized capital .stock of the Newport News Shipbuilding & Dry Dock Co. has been reduced to $10,000,- 000, the amount outstanding. Author- ized capital formerly was $26,000,000. lTnl:et‘&‘meplpny by :hl.; means will elim- ayment of taxes on author- ized but unissued capital. POTATO MARKET. CHIC. .t mmm 23 () (United 113; on track, 239; total United States shipments Saturday, 548; iuemy. 25; steady, trading only fair. 5; orado, McClure's mostly, 1.45: Idaho lli.\lxgsets No. 1, 1.40a1.50; commercials, e TREASURY CERTIFICATES. (] orted by J. & W. Seligman & Co.) R‘l.‘:‘h turit) 1708 Dec. 18, "ozt 90 3133 100953 100 1-32 Mk 99 31-32 100 1-32 i : B Brg BER, Clev Term bs ‘73. ClI Term 6%s ‘72, Colomb Colom Colon Ofl 6s '38. Colo & Sou 4348 Col G&E 53 May’b: Col G&E cou 5561, Com Inves 58 °49. CCMd 1st rf 5850 Con G NY 4%s°51.. Con G N Y 5% " Con Pwr Jap 6% Con Pow Japan 7s.. Copenhag 58 Cuba RR Cuba 5%s '45. Cuba RR 6s ctf Cuba RR rf 7%5 36 Cuba Nor 5%8°42.. Ceecho 8s°52. Del & Hud rf 48 '34. Del Pwr&L 4%8 71, 52 '53 Dodge Br cl 68 40 Dugquesne 4%8'67. Dutch East 168'47, Dutch East I 6852, East C Sug 7%8 317, Erle con 45 A'53. Erie 58'76. . Flat 7s ex war ‘46 Finland 6%8 ‘56 Finland '1-;50 Gelsenk’hen 6s°34 Gen Motors 6337 Gen Th Eq 6 German 5%s ‘65 German BK Ger Cen Ger Cen Bk 63760 O German 7s rep *49. Bank 7 60 t of Agriculture).— | 00 Hud & M ad 58 '67. Hud & M rt 58'57... Humble Ol 65 '3 Humble O 5%s'32 Hungary 7% ‘¢ 111 Bell Tell 111 Cent £ 111 Cent 4% "66. 111 CCStL&N 58 A, 111 Steel 4% 8 °40. Inland St 438 B'81 Int Rap Tr 68 541y T3 78 wRemRoneN e KeamunES - s a SR mm » 2613 1007 ~100% 53% 534 & i Berbira paasunmtanaSnarvancsian~ moanaiia 9 e s o & 119 1 1 30 5 2 5 21 8 11 1 2 4 13 19 15 22 Rag ansan ok 1005 4 104% 104% 55 431 9 L P S| Penn 6345 Int Rap Tr st Int Rap Tr Sales. High. Low. 2:85 19 50% 49% Int M Co 58 ret’41. Int Match 58 47 Int Pap 58 A *47. Int Pap 6s '66. Int Ry C A 5872 IntT&T ¢%48°52. Int T&T cv 4%8'39.1 Int T & T 58'55. Italy 7851 “ee Japanese 5348’65, , Japanese 6%s ‘54. Kan City Sou 3s'50, Kan City Sou 5s'50 Kan G&E 4%s'80. . Kan City Ter 4560, Kend 5% s '48 ww 6115 Kreug & Toll 58'59. 23 Laclede 5%sC'53.. 2 Lake Shore 33897 10 Lautaro Nit 6s‘54.. 5 Leh Val cv 45 2003, 1 Lig & Myers 7s'44.. 7 Loew's G3 ex w '41 Lorillard 58°5 Lorillard 5%s'37,, 2 Lorillard 7s "44. La & Ark 55'60. = 01 62 5 8 31 4 10 6 6 20% 79 3% 64% 69 HBY 'HEV- L&N 15t 5%s 2003, McKes & R 5% 50, Manh Ry 1st 45'90., Market St 7s "40 Marseille 6s '34. Midvale Stl 53 '36. Milan 6%s'62. MilERy & L 53 1i) E1 Ry&Lt 53 '71 tP&SSM cn 4s. . tP&SSM 58 gtd. Mo Pac gn 4575 Mo Pac 5s A '65. Mo Pac 58 F "17. Mo Pac 58 G '78. Mo Pac 58 H'80.. Mo Pac rf 53’81 (Mo Pac5%s A 4015 1005 1004 38 38 2% 948 94y 79% 80 1013 101% 43 43 Mor&Co 1st 4 Nat Dairy § Netherlands 68 72.. NOT&M5s B'54. Nw S Wales 58 '67.. Nw S Wales 55°68. 10 N Y Centdb 4s'34.. 19 NY Cnrf 4%s 2013, 26 NYCrfim582013.. 3 N Y Centdb 6s'35 NYC& St L 4s'37 NY C&StL 4% NYC&StL5% NY C&St L 6: N Y Ed 15t 63%s'41. 10 NY ELH&P 4549, 29 NY NH&H 435 NY NH&H 43%8 67, NYNH&H clt 6540, NYNH&H cd 65'48. NY O&W 1st 4w'92.. NY S&W gn 5543, NY Tel 434339, |NY W&B 4%s 46 . Nia Sh Md 5348 '50. Nord 6%s°50. Norf South 55 '61. . No Am Co 68 61. . Nor Am Ed 58 '57. . Nor Am Ed 5s C '69 Nor Am E 5%s NorOT&L Nor Pac 33 2047 Ner Pac 48°97.. 51 92 2% 90% 87% 30% 40% 401 10% 95% 48 8 101 64% 64% 8% 78% U 25 90 93% 93% 89 8914 96 96 102 102 58% 581 821 69 90 1% 80 86 85% 86 63., 47 Nor Pacr 1 6s 2047 6! orway 6s°43. Norway 6s'52.. Oreg-Wash 43°61. Orient dev 5% 5'58 53 79 2% 72 Ortent dev 6 a1 % 75 43. ... % 101% 10 Pac T&T 1st 58’37, 102‘ hos Pac T&T rf 55 '52.. Paramount 65 '47. . Paris-Ly M 63 '58, Paris-Ly M 7s 5| Paris-Or 5%s'68. . Pathe Exch 7s '37 Penn 4548 sta. Penn4%sD'81. Penncv 4%s'60 Penn gn 4% 3 '65 Penn 4%s'70. Penn 58 '64 827 9514 861 72 93% Penn P&L 4% ‘33‘;‘ Peoples’ Gas 5 Pere M 1st 4s Pere Mar 4%s '80 Pere M 1st 58 '56. . Peru 63 '60 Peru 7s '59 Phila Co 55°67. .. Phila Elec 4s'T1 Phil & Read 65 '49 Philllp Pet 5% s ‘39, PCC&StL 4%s'77 Poland 6s Poland 7s 47 Poland Port Gn El 4 . Pos Tel & C 55'53. . Prague 73%4s '52. Prussia 65 '52. Public Serv 4s'71. Pub Sv G 414867, . Pub Sv G 4%s°70.. Queensland 7s41.. Rem Arms 6s A 37, 42 19 Rhine West 7s '50. Rich Oil Cal 6s 44 Rio de Jan 8546 R Gr Do Sul 6s '68. Rio Gr W 1st 45 '39. RIAr&L4%s'34. Rome 63%48°52..... 4 Roy D 4545 ww StL IM R&G 4s'33. St L&SF in 43 A '50 11 StL&SF 4%s'78. 58 StL&SF p15sB'60 1 StS W cn 4s°3: 3 StLS W 1st 45’89, StP&KC SL 4%s'41 St P Un Dep 5s '12.. SanA&AP4s'43.. 2 Sao Pau 78’40 ret.. 11 Saxon P W 6%s'1. 11 Saxon 78'45....... Seab A Lirf 4s'59. Seab A L cv 634! Seine 7s *42 Serbs-Cr-S1 Shell Un Of} 55 '47. Shell Un Ol 68 Shinyetsu 614 Sinclair Oll 6% SincO7scv A" 1 5 1 4 16 20 5 4 105% Sofssons 6s '36... Solvay Am 5542 Sou Bell T&T 5: SW Bell T 53 A Sou Pac4%s'81... Sou P&Or 4%4s '17. Sou Ry gn 4s Sou Ry 58°94.. Sou Ry 65 '56 Sou Ry 6%s ‘66 StOIINJ 58°46.... StOIIN Y 4%s '61. Sweden 6% '54. Swiss5%s 46 Taiwan EP 5%s'71 Tenn Cop 6s'44. ... Tenn EI P 63 A "47.. Ter As St L 4 72 101% 95 ¢ 10114 958 » Apmmumns cBuBna~an 83% 102% 103 70 70 70 70 103% 103% 81 81 4 Tex & Pac 58 B '77.. Third Av rf 4s'60. . ‘Third Av 1st 58°37. Third Av adj 6860, 36 Toho El Pw 78'56.. 5 Tokio 58 52 1 Tokto 5% Toklo EI Lt 68°53.. 1 Un Pac 18t 434 Un Pac 43’68 Unit Dre cv § o 6 5 3% ) ONDSe=ezma] [PRUES FORSTEEL BXPECTD 10 H0LD Doubling of Present Demand Would Mean Profit for Industry. Special Dispatch to The Star. PITTSBURGH, November 23.—Some large and well poised steel buyers are strongly of the opinion that if steel demand were double its present vol- ume, the steel industry would be able to show moderate-sized profits instead of the losses reported for last quarter and the greater losses to be expected for the present quarter, which promises to show an average production at about 28 per cent of capacity, against the 31 per cent average of the third quarter. Such a doubling would give the mn- dustry an operation between 55 and 60 per cent, a low rate for efficiency, ac- cording to ordinary standards. But buyers”insist that they are not respon- % | sible for the enlarged capacity and are under no obligations to give it em- ployment. 1t is pointed out that while steel pro- ductlon is commonly estimated from week to week in percentage of capacity 15| and is efficially reported in that man- ner monthly, the assumed 100 per cent is no measure of future demand when it does not apply to demand in_the good years of the past. The official capacity rating, now nearly a year old, is just under 67,000,000 tons of ingots per annum, but with additions this i year present capacity is not far from 70,000,000 tons. There was a period of seven vears of heavy steel demand through 1929, and the average of the seven years was 45,760,000 tons a year. Against a ca- pacity of 70,000,000 tons that would make only a 65 per cent operation. Allowing for demand to grow as it did during that period it would now represent approximately an 80 per cent operation, whereas, of course, demand has been going the other way. Steel producers may be expected to hold present prices indefinitely, since they Lave excellent reasons for doing 80. ‘There is no change, as there was at intervals before the war, of lifting prices by getting under them, of ac- cumulating a backlog of low prices and then marking up prices in a period of full operation. It would be quite im- possible to fill up, and difficult or im- possible to get buyers away from their Present style and back to the old style of making forward commitments. In the present situation cut prices are practically out of the situation, as given cut would bring only & small or- der, and the chances are that the trans- action would be known throughout the trade in 24 or 48 hours, simply pulling down the market for everybody. E There are concessions of steel for large fabricating jobs, but that is & 1021 10219 | S€parate case, since each job is differ- ent. <Even line pipe, which in the old days used to be a job-to-job market, has been well stabilized for months past. ‘The steel market as a whole may be de- scribed as presenting not merely steady but rigid prices. Probably the mills have little hope of securing higher prices, despif® recent losses, but they may mark up some Krlces on paper for first quarter with the object of promoting purchases at present levels. pyright, 1931.) INVESTMENT TRUSTS NEW YORK, November 23 (#)— Over-the-counter market: Bid. Asked. A BC Tr Shrs D A B C Tr Shrs E Am & Founder: AR Founders 1-40%h Com Am ‘Tns St Al f c i Atl & Pac Int units’. & P ke Bansicilla Corp Basic Industr ritis} 208, o nBanBe oY a2 Shrs A General Equity 4 Granser Trade Gude Wiamill Trad Incorp Investors . . aders of Indust Leaders of Indust Leaders of Indust Low-Priced Shrs . Major Corp Shrs. Mass Invest Tr. Mutual Inv Tr A Mana, Nation-wide Sec ecur Oil Shares unit: Old Col Inv Tr Qld Col_Tr A: trol Trad A.. Public Serv Tr ' Repres Tr Shrs Int Sec 614 | Second 5% | Sec Selected Income S’ Selected Mlnlkle Trust k. All Am Collat Trust Street Invest Elec Lt Universa' Tr Sh Low. 2:55, 65 65 623 624 101 101 Sales. Vanadium St 5s'¢1. 4 Vienna 63 52..... Va Ry & Pw 6834, High. 67 Rorrorma o Warn Quin 6: Warner Sug. Warsaw 7s ‘58 Wst Sh 15t 45 West El 4b 5 West Md 4s 52 Utll Pw 65’69 ww., 11 Util Pow 5%8'47.., & 1 W = Wil & Co 1st 6341, Wis Cent gen ¢s'36 Yokohama 6s "61 Ygstn S&T 65 A'TS Ygstn S&T §s B'70. P mwnEnnE AeaNnn— e