Indianapolis Times, Volume 47, Number 254, Indianapolis, Marion County, 1 January 1936 — Page 15

Trends Bonus Fight Again Looms Before Congress. BY JOHN T. FLYNN

YORK, Jan. I.—Now comes the bonus again. As soon as Congress meets bills for paying the bonus will be introduced. And it is being whispered around that one such bill will pass. If it does it will be a bill to pay the veterans about $2,300,000,000 and to raise the money by selling bonds. If this is done, we may well

thank the violence and fury of the attack on the Patman bill last year. The whole force of the fury of opponents fbf the bonus was directed against the Pat man bill because it proposed paying the bonus with an issue of government money. This w a s properly called inflation. But

Flynn

by inference the Dlan to pay by issuing government bonds instead of currency was assumed not to be inflation. a a THE situation as it stands now is about as follows: The bonus is an outstanding debt of the government. It is not a question of whether we will pay the bonus or not. The government has already voted to pay it. It is a question whether we will pay it in 1945—10 years hence—or now. Therefore we owe the money. We can not get out of paying it. And the debt was contracted by a Republican Congress. Shall we pay it now or in 1945? That is but one question. The other, and more important, is how will we pay it? Apparently the plan which will be put through will be to issue bonds. This may be done either by giving bonds to the veterans or by selling the bonds and paying them in cash. *• a a IT is important to remember that if we adopt either of these plans we will not be paying the bonus. You do not pay a debt when you borrow money from Peter to pay it to Paul. You merely owe the money to Peter instead of Paul. If, therefore, we isue bonds borrow $2,300,000,000 on government bonds—and pay the veterans, we will still owe the bonds. The bonus debt will not be paid. It will still hang over us. Furthermore, we will produce inflation just as surely as if we had printed the money under the Patman bill. The great battle against inflation waged with such vehemence last year will have to be fought all over again. a a a WITH this difference, that the ill-advised focusing of fire-on the Patman bill, has given the Vinson bill a kind of respectability. The President may be able to yield now on the Vinson bill and boast that he saved the country from the Patman bill. In reality he will have saved the country from nothing. Both bills involved inflation. There is only one way to pay a bill and that is to pay it. In the case of a government that means paying it with cash. And there is only one way for a government to get cash and that is through taxes. The issue then before every sound statesman is: Are we willing to impose $2,300,000,000 of taxes on the nation to pay the bonus? And if we are, whom shall we tax? If we don't tax, we will- not be paying the bonus, merely shifting the debt to some other bunch of creditors. (Copvrißht, 1936, by NEA Service) VALUE OF 50 STOCKS RISES .87 PER CENT Total Valuation for Week Placed at t $17,082,266,125. Times Special NEW YORK, Jan. I.—The market value of 50 representative stocks listed on the New York Stock Exchange at the close of business for the week ended Dec. 28, was $17,082,266,125, an increase of $148,739,375, or .87 per cent, compared with the market value of $16,933,528,750 at the close of the preceding week. Pa,u4 H. Davis & Cos. announced today. At the close of the corresponding week a year ago. the same 50 stocks had a market value of $12,034,534,000 indicating an increase of $5,047,732.125, or 41.94 per cent, during the year. Timex Special CHICAGO. Jan. I.—Twenty-five representative stocks listed on the Chicago Stock Exchange had a market value at the close of business for the week ended Dec. 28, of $837,666,500. an increase of $lB,160.250. or 2.21 per cent, compared with the market value at the close of the previous week, it was announced today. FORT WAYNE RAILROAD SHIPMENTS INCREASE Officials of Four Companies See Improvement for 1936. Time * Special FORT WAYNE. Ind., Jan. I. Officials of four railroads operating through Fort Wavne today reported a slight but steady increase in shipments picked up in the city during 1935. They express an optimistic outlook for the coming year. An increase in volume which started in September has piaced the Nickel Plate business about 6 per cent ahead of that in the preceding year, Arthur D. Peters, superintendent of the Fort Wayne division, announced. Freight handled during December is running approximately 9 per cent greater than in same month a year ago. With livestock shipments slightly lighter this year the increase was attributed to a heavier movement of general commodities. Shipments of raw materials and manufactured product* in grains, lumber and steel Industrie* have advanced. The Pennsylvania, New York Central and Wabash railroads also report increases.

♦ ♦ Abreast of The Times on Finance ♦ ♦

BANKERS, BROKERS AWAIT MAJOR DEVELOPMENTS AT WASKINGTON IN NEW YEAR Financiers Watch Closely for Forthcoming Decisions by SEC, Federal Reserve Board and Even President Roosevelt. BY THOMAS L. STOKES Times Special Writer WASHINGTON, Jan. I.—The New Year finds Wall Street and the banking fraternity looking forward to numerous developments, some imminent, affecting government policy toward institutions with which they are vitally concerned. These involve forthcoming decisions by the Securities

and Exchange Commission, the Federal Reserve Board, and President Roosevelt himself. Under the stock market act of 1934, the SEC was instructed to submit recommendations to Congress. by next Friday as to the feasibility and advisability of segregating the functions of brokers and dealers. The possibility of reducing the present great volume of over-the-counter trading, and forcing such business onto the regular exchanges, is expected to be discussed. The full report of the SEC may be delayed for a few weeks, with perhaps some general suggestions filed in a preliminary report. Meehan May Go to Courts The Reserve Board is expected soon to issue its regulations, long in preparation, covering loans on securities by banks. These will supplement existing restrictions on loans by brokers. Affecting the stock market, likewise, is the current SEC hearing on charges against Michael J. Meehan, New York trad* , of manipulating Bellanca Aircraft stock. The hearing may run for two or three weeks or more, after which the commission will make its decision. If it is adverse, Mr. Meehan is expected to challenge the constitutionality of the stock market act in the courts. Thus far the measure has escaped a court test. Bankers are interested in the action the President will take to reconstitute the Federal Reserve Board. The 1935 banking act enlarged the board from six members to seven and instructed the President to appoint the new board by Feb. 1. Eccles to Be Renamed Mr. Roosevelt has announced he ! will rename Marriner S. Eccles, the 1 44-year-old Utah banker, as head of the board. He may reappoint ! other members of the present board, but there are likely to be two or three new figures on this important agency, which will operate under greatly increased powers. Facing the new board—if a change in policy is not made previously by the present board—will be the question of what to do, if anything, about the $3,300,000,000 of excess reserves piled up in the nation’s banks, which some see as a possible source of a dangerous credit inflation. Bankers and economists differ as to whether the board should put a check-rein on these reserves. The method usually suggested is to increase the reserve requirements of banks and thus “freeze” a part of the excess. Suggests Careful Watching The board also has two other means of restricting credit—open market operations and increases in the rediscount rate. The board's open market committee, consisting of governors of the 12 regional banks, declined to lecommend restrictive measures when it met here recently, but suggested that the situation be watched carefully. Mr. Eccles holds that these reserves do not constitute an invitation to Inflation at this stage of recovery, with 10 million persons still unemployed and credit still needed for business and industry to absorb this load. No More Banking Legislation Recently so eminent a banking authority as S. Parker Gilbert, a J. P. Morgan & Cos. partner, supported Mr. Eccles’ view. Bankers who take the contrary attitude are led by Winthrop W. Aldrich, chairman of the Chase National Bank. The Federal Reserve Board is more conscious of a possible speculative boom on the stock market than it is of the danger of credit inflation for general business, and through its forthcoming regulations on bank loans, as well as by other means at its disposal, will seek to ! check any tendencies toward a stock boom that might react injuriously on business. Bankers need not be concerned about further banking legislation at the new session of Congress, for this is not on the Administration agenda. Busigraphs COMMERCIAL FAILURES (Dun * BRADSTREET) 3 | „ DOTTED LINE IS THE PAST Ul TEN YEARS AVERAGE OF > THE SAME MONTHS ‘"r I'fMHi NO J FMAMJJASON Liiiil , <?,?? THE BARKER CORfi GENERAL DISTRIBUTORS INCORPORATED INVESTORS The death rate of business continues low, although here was just a slight increase in t le number of commercial failures in November over a year ago. On the other hand, failures were 24 per cent less in number in tiie first 11 months of this year than in the same 1934 months. The continued low rate of business failure! 5 ; indicates general financial strength for those concerns surviving the depression. Many believe such a condition favors the extension of credit.

INDIANAPOLIS, WEDNESDAY, JANUARY 1, 1936

BOND AVERAGE AT 6-YEAR TOP Market Moves Higher on Stimulus of Low Rate for Money. Bp United Press NEW YORK, Jan. I.—The bond market pushed further into new high ground for the recovery in 1935 under the stimulus of unprecedented low rates for money and a revival of speculative interest in the lower grade rails and industrials. Trading was slightly under 1934. The Dow Jones Average of 40 representative bonds touched the highest point since the middle of 1928, while the averages of 10 high grade rails, 10 industrials, and 10 utilities all made record highs. Although second grade and speculative carrier obligations were burdened through the first -months of the year, by adverse traffic and earnings reports, interest in them revived briskly through the autumn, and dealings in the group accounted for a large proportion of the turnever in the market. A majority of the utility bonds on the Stock Exchange are of the obligations of operating companies and are of an investment rather than a speculative caliber and for that reason they failed to mirror developments in the passage of the Wheeler-Rayburn bill closely. United States government bonds sold at new highs, and the Treasury was able to market two issues, one at 2% per cent and one at 2% per cent, with additional offerings of each issue later. As the year closed, the 2%s were commanding a premium of 4 point or so. The Treasury’s largest operation of the year was the refunding of the last of the Liberty bonds. Italian bonds featured the foreign list, breaking 40 to 50 points in heavy dealings as the ItaloEthiopian war clouds darkened and broke. After the first wide declines, however, some support developed and activity slackened. BOX OFFICIAL VIEWS BUSINESS PROSPECTS Verne Powell Optimistic Over 1936 Trade Conditions. Times Special MARION, Ind!,. Jan. I.—Verne Powell, vice president of the Lindley Box and Paper Cos., speaking at the dedication of anew factory building here late last week expressed optimistic views regarding business prospects for 1936. Speaking before approximately 150 employes at a dinner served in the new building, which is to be used for the storage of raw materials, Mr. Powell said that construction of the new unit is one of several improvements, including the purchase of new machinery, for which the company is spending between $25,000 to $30,000 during the next year. He also stated that this year was the first time since 1929 the company had not shut down for at least one week for inventory. The company is now extremely busy filling a huge order received from the wholesale department of Marshall Field at Chicago, along with many other large orders. BENDIX AVIATION CORP. FORMS NEW COMPANY Subsidiary Set Up to Produce Marine Equipment. Times Special SOUTH BEND. Jan. I.—The Bendix Aviation Corp. has formed anew subsidiary, consisting of a manufacturing and distributing organization for marine equipment, Vincent Bendix. president, announced here today. Carbueretors for the new equipment are already in production at the ssouth Bend plant and other parts may also be produced there, according to Herbert L. Sharlock, director of public relations for the Bendix Products Corp., a subsidiary of the Bendix Aviation Corp. The new concern, the Bendix Marine Products Cos., has been under consideration for some time by officials of the Bendix firm, it was said. Little information has been released concerning the location or personnel of the new company. SEES SHARP UPTURN Times Special PITTSBURGH. Jan. 1. —The prediction that 1936 will be one of the most successful years in the history of the flat glass industry, with the continuance of the decided business upturn which has characterized the industry during the last year, was voiced today by H. S. Wherrett, president of the Pittsburgh Plate Glass Cos.

BUY A HOME WITH A LOAN FROM A LOCAL Building & Loan Assn.

Took Leading Roles in Business Year

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Jesse H. Jones

Big Board and Curb Seats Double Prices By United Press NEW YORK, Jan. I.—Memberships on the New York Stock Exchange sold down to $65,000 in April, 1935, ...tie lowest level since 1919 but recovered sharply as trading activity revived with several sales at $140,000 in September and November. On the Curb the price of memberships made anew low since 1925 at $12,000 in March, and then recovered to $33,000 in November. Following is the tabulation of highs and lows of Stock Exchange and Curb Exchange seats dating back to 1921: jjStock Exchange Curb Exchange Year. High. Low. High. Low. 1935 $140,000 $65,000 $33,000 $12,000 1934 190,000 70,000 40.000 17,000 1933 250,000 90,000 50,000 25,000 1932 185,000 68,000 55,000 16,500 1931 322,000 122,000 137,500 40,000 1930 480,000 205,000 225,000 70,000 1929 625,000 350,000 254,000 150,000 1928 595,000 290,000 170.000 56,000 1927 305,000 170,000 67,000 22,000 1926 175,000 133,000 35.000 17,500 1925 150,000 99,000 37,500 8,500 1924 101,000 76,000 9,000 4,000 1923 100,000 76,000 9,500 3.600 1922 100,000 86.000 10.000 4,200 1921 100,000 77,500 8,000 3,750 Stock Exchange record high, $625,000 (1929); record low. $2,750 (1871). Curb Exchange record high $254,000 (1929); record low, $3600 (1923).

RAILWAY HEARING SET Public Service Commission to Hear Petition Jan. 28. / Hearing on a petition of the Northern Indiana Railways Cos. to sell real estate is to be held by the Public Service Commission of Indiana, Jan. 28, it was learned today. The real estate includes right-of-ways on streets and highways unused since several lines of the company were abandoned June 2, 1934. The lines ran from South Bend, to La Porte to Michigan City, from South Bend north to the IndianaMichigan line, and Mishawaka to Elkhart to Goshen.

gi&siAjcl&lc ... ■B C* raer nl WashiDQton Mil Meridian Street* h n n Corner o! Wasliinoloii and Pennsylvania Sfreeti Cm* li Wishiagtoß ud Olinoa Stmt* - Convenient to all transportation. Busiest retail shopping are* KLEIN* KUHN. PROPERTY MANAGEMENT Lincoln 3545 '.Guaranty Bldg.

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Gerard Swope

AUTO INDUSTRY AIDSREGOVERY Hudson Executive Expects Strong Demand to Continue. By United Press NEW YORK, Jan. I.—Compared with industry in general, the continued progress of the motor industry in 1935 must be regarded as perhaps the most notable contribution to the country’s recovery, Roy D. Chapin, president of the Hudson Motor Car Cos., declared today. “The output of motor vehicles by American companies in 1935 exceeded 4,000,000, a gain of about 40 per cent over 1934,” Mr. Chapin said. This was the largest production for any year since 1929, he explained. The wholesale value of the industry’s 1935 output exceeded $2,000,000,000. “Three factors are accounting primarily for the continued demand for new automobiles. The first is the heavy demand for replacement of old cars by people who postponed purchases they would ordinarily have made in the past few years. “The second is the desire of the public to obtain the improved styles and performance that are characteristic of new models. The third is the demand of the public for safety features that have been engineered into new models now being offered by many companies. “The tremendous gain in the industry’s output during 1935 has resulted in greatly increased employment. Increased motor production means greater purchases of steel, alloys, machinery, tools, leather, glass, rubber, lumber, and many other products.” ASKS TO ABANDON LINE WASHINGTON, Jan. I.—lllinois Traction, Inc., has applied to the Interstate Commerce Commission for authority to abandon a 10.25mile branch line between Georgetown and South Danville, 111.

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John J. Pelley

LEVER BROS. TO BUILD NEW COVO FACTORY Hammond Structure to Cost More Than $5,000,000. Times Special HAMMOND, Ind., Jan. I.—A new factory for the production of Covo, a vegetable lard substitute, to be sold direct to the consumer, is to be built in Hammond at the Robertsdale plant of the Lever Brothers, it was announced today. . The cost of the new plant along with other contemplated improvements is expected to run between $5,000,000 and $10,000,000. The new product is expected to heighten competition among lard substitutes. Covo, at present, is manufactured at the Lever Brothers plant at Englewood, N. J. The contract for the Hammond plant has been let to Stone & Webster Engineering Corp., Boston, which has already completed soundings for the foundation. With additions planned for other refineries, the company is expected to invest approximately $25,000,000 at the plant before completion. CITES PROJECTS TOTAL Building Programs Under Contract Valued at $128,007,399. By United Press WASHINGTON, Jan. I.—The Treasury has 609 building projects under contract, involving total obligations of $128,007,399, Rear Admiral C. J. Peoples, director of procurement. reported today. This construction work includes all projects through Dec. 27. It is the largest total of work under contract during the calendar year and the amount involved is more than double that under contract a year ago.

The INDIANA NATIONAL BANK of Indianapolis Statement of Condition at close of business December 31,1935 . RESOURCES Cash on Hand and Due from Federal Reserve and Other Banks $42,374,770.94) U. S. Government Bonds, Notes and ( $80,246,701.75 , Certificates 37,871,930.81/ Other Bonds and Securities 6,666,509.59 Loans and Discounts 13,866,331.67 Overdrafts 25.31 Bank Building and Fixtures 1,289,639.17 Other Real Estate Owned 85,170.63 Accrued Interest Receivable • 34,393.19 Other Resources 19,596.93 Total $102,208,368.24 LIABILITIES Capital $3,000,000.00) Surplus 3,000,000.00 $6,386,026.09 Undivided Profits 386,026.09/ Reserves 251,318.92 Dividend Payable January 2, 1936 52,500.00 Deposits 95,518,164.04 Bills Payable and Rediscounts ) None Securities Borrowed j Other Liabilities 359.19 Total $102,208,368.24 OFFICERS DIRECTORS ARTHUR V. BROWN ROY E. ADAMS Pres. J. S. HOLLIDAY President J. D. Adams Man. Cos. of W. ,T. Holliday & Cos. GWYNN F. PATTERSON FRED G. APPEL Pres. W. G. IRWIN Vice-President Gregory & Appel, Inc. Pres. Irwin-I’nion Tr. EDWARD D. MOORE hfnry w bewftt Co s” Cos u U8 ’ Ind- * Vice-President henry w. bennett JO hn j. madden ■R MAT f)TT 'FT FTCHFR Ires. Indpls. Stove Cos. Pres. John J. Madden R. MALOTT FLEiCHER ARTHUR V BROWN Manufacturing Cos. Vice-President and Cashier iKiHLK v - WILLIAM P. FLYNN President j WYNN F. PATTERSON Vice-President YOLNEY M. BROWN l e resident ROLLIN W. SPIEGEL Attorney-at-Law NORMAN A. PERRY Vice-President eugene h. dakrach Charles s. rauh HARRY R. FULLER Pres. Inter-State Car Cos. Pre % Yards “c Vice-President r . Ff . Rnyv , nv Prpa btocK lardß Co ’ TOWW R VTTRRT<*S G- A EF S°J i . PETER C REILLY Pres. JOHN P. KURFISS E.l IttjMi, B.pm.ic Cr,o.oti„ e c. ROBERT B. MALLOCH * BRODEHURST F.LSEY oß i K j’ siftFL.n Ten Assistant Cashier Secretary-Treasurer J ' 5,11111,1 R, *“ lty Co * JAMES L FISH Indpls. Glove Cos. SAMUEL B. SCTPHIN Assistant Cashier edgar h. evans Pre p?~ r company PT ARtTMCI? *T HR ADV Chairman of Board, CLARENCE T. BRADY Acme-Evans Cos. WILLIAM L. TAYLOR Assistant Casmer Aimr^r.ii.i. w r MVRTR RRnOfWAY R- MALOTT FLETCHER Attorney at u* C. MERLE BROLK.WAY Vice-Pres. and Cashier RUSSELL L. WHITE AUaitor Co-Tr. Malott Estate Prea. White Baking Cos. Specializing for 70 Years in Commercial Banking

Markets Observe New Year*s All security, commodity and grain exchanges throughout the country were closed today in observance of ?\ew Jear’s Day holiday. Livestock markets also suspended trading.

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RAIL TRAFFIC AT NEW HIGHS Government Makes Millions as Result of RFC Operations. Railroad traffic, both freight and passenger, and net operating income were greater in 1935 than in any year since 1931, John J. Pelley, president of the Association of American Railroads, announced in reviewing carrier activities during the current year. Mr. Pelley also reported that not a passenger was killed in train accidents in the first 11 months of the year just ended. Under the able leadership of Jesse H. Jones the Reconstruction Finance Corp. continued its work of lending funds to banks and other business institutions in need of capital. In addition, the RFC took over many obligations from the Public Works Administration after that agency made loans and grants to municipalities, many of them, incidentally, located in Indiana. The RFC later sold these obligations to financial institutions at a profit of many millions of dollars to the Federal government. Nineteen hundred and thirty-five saw an all-time peak in electricity consumption. Gerard Swope, president of the General Electric Cos., announced today. Approximately 7 per cent more electricity was consumed in 1935 than in 1934 and 3 per cent more than in 1929, the previous peak year, Mr. Swope said. The stock market experienced better trade and made greater advances than in any year since 1931. Charles R. Gay succeeded Richard Whitney as president of the New York Stock Exchange.

Charles R. Gay

‘OVER-COUNTER’ TRADE FREEDOM ENDEHY 0. S, SEC Completes Plans to Bring Vast Business Under Control. By United Press WASHINGTON, Jan. I—The Securities and Exchange Commission completed plans today to bring under government control the vast over-the-counter security business with the start of the new year. Chairman James H. Landis of the SEC reported 5088 over-the-counter brokers and dealers having 7400 offices and 85,000 employes had registered with the commission, effective today. This was the last segment of the huge American securities business to be brought under Federal control. Organized security exchanges trading paper annually with a value cf more than $10,000,000,000. already are operating under SEC regulation. Larger Than Exchange Trade The over-the-counter business, representing business not done on organized exchanges, was described as even larger than the exchange business with annual turnover estimated at from $15,000,000,000 to $40,000,000,000. Brokers and dealers registered under the law are to operate under commission rules prescribing certain standards of fair practice. Those failing to register are prohibited from conducting an interstate business in securities not exempt from the law. These are largely Federal, state and municipal obligations. Mr. Landis revealed some former security dealers not willingg to submit to SEC regulation are branching into other lines of business in paper and commodities not subject to SEC regulation. He threatened non - registering brokers and dealers with court injunctions should they continue in business. He said 36 persons in this business had either withdrawn or had been denied registration with the SEC. “Must Nots” Are Listed The major grounds for denial of registration were set forth as follows: Wilful misrepresentation of material facts. Conviction in connection with the securities business within the last 10 years. Permanent injunction from engaging In securities business in the last 10 years. In some cases, Mr. Landis said, these restrictions had been waived. But he emphasized the commission had not in any way passed upon the financial standing, fitness to conduct business, or upon the merits of any security offered by the brokers or dealers.