Indianapolis Times, Indianapolis, Marion County, 20 July 1936 — Page 11

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Questions Value off

Liquidity in. Stocks.

BY JOHN T. FLYNN .

“¥

YORK, July 20~Back in

the years before 1029, the

Stock carried on a very _ extensive, iieliigent and effective propaganda in order to impress on

EY In order lo give io Investment ; certain quality called 1iquidity. And now the presi-dent-of the

around the country that * liquidity is essential to our financial sys- ‘ tem; that there would be no Hepuldity: " out. the - Flynn change. On the Exc are large numbers of members who are speculators. They are there ready to buy and sell all the time. They will puy any one’s stook at a price. It is their presence which makes it pos‘sible for you to sell any share you have any time you get ready to part with it. It is your ability to convert your shares into éash on the. shortest notice which gives them liquidity. . . 88 : HESE are mere statements by the president of the Exchange. They are worthless without facts to prove them. And no one has ever offered any facts to prove that this so-called liquidity is really a good thing. As a matter of fact a good deal has been offered to prove that it ‘is on the whole a bad thing. The whole argument is built on the hotion that a man ought to be able to convert his investment into cash on a moment's notice. The owner of a grocery or a hardware store or a factory or an apartment house or a residence cannot pick up a telephone and sell it within a few minutes. Yet this does not prevent men from putting countless‘ billions into stores, factories, apartment houses and residences. ' ; 8 '8 n HE owner of a share of stock. " however, can reach for his phone, call his broker and unload his shares in les stime than jt takes to tell it. What is the result? The factory or store or apartment house . owner, because he has to hold on {+ his property, feels a sense of responsibility: for it and its management. The share owner feels no responsibility.

He doesn’t care what the managers of a corporation do with it; how their exploit it; how they exploit labor; how pad their public relations are; how unsocial their whole conduct. * If things go a little wrong in the corporation, he does not feel called on to join with other stockholders to correct them. He merely reaches for, the telephone and unloads the share. EJ » 2

E hear much of private prop“erty. Private property is not merely a right. It imposes obligations. The owner owes certain civic and moral and social obligations to the society which protects him-in his property. But this element of liquidity in shares has resulted: in completely destroying all sense of responsibility in owners. What this has cost the nation in dollars and cents as well as in

morale no man can say. (Copyright, 1936, NEA Service, me.)

LOCAL CARPET AND

fd 5 RUG FIRM EXPANDS |}

Business Done - in Three Months : Exceeds 1935 Total.

A building 40x114 feet is to be

erected at once adjoining the Mc- |TH

Kelvey & Kell plant at 502 S. Penn-sylvania-st to care for the firm’s increasing business .in the rug, carpet, | slip-cover and linoleum field, according to Henry O. McKelvey, a partner in the company. Business of the firm during March, April and May was greater than that of the entire year of 1935, Mr. McKelvey said. The new structure is to be taken under a longterm lease and it will nearly double the company's floor space. The new building is to house the office, the cleaning, slip-cover: and upholstering departments, and. provide a .storage room for furniture

‘recent transaction

[oosT OF FOOD RISES 8.5 PER

Indianapolis Than in 50 . Other Cities.

The advance during the last two weeks of June was attributed to the continued rise in the price of butter and eggs. “Higher prices were reported for 43 of the 84 foods included . in the index; - declines. and 10 were unchanged,” the government bulletin said. In polis,” the advance in the cost of eggs amounted to 6.1 per cent in two weeks. Other percentage increases: Fruits and veégetables, 29; dairy products, 0.8; beverages and chocolate, 0.5; sughr and sweets, 0.4; fats and oils, 03; cereals ‘and bakery products, 02. Only meats showed a decline and this was very small, being one-tenth of 1 per cent. City Heads List

The -incredse in food costs from a year ago was greater for Indianapolis than for any other of the 51 cities listed in the report.” After the local rise of 85 per cent, Manchester, N. H., with a gain of 8.1 per cent, Portland, Ore., up 7.7, and Pittsburgh, up 7.1 per cent, were next in order. The gain in New York City was only 31, in Chicago, 4.6; .in Washington, 1.0, and in: Detroit, 4.3 per cent. : “The. food ‘cost index for June 30 was 84.3 .per cent of the 1923+25 average,” the report said, “Prices aré now 29.8 per cent higher than for, June: 15. 1933, when the‘ index was 64.9. They are 188 per cent lower thgn for June 15, 1929, when the index ‘was 103.7 and the prices of all but two foods then included in the index (cabbage and potatoes) were ‘higher than at present.”

Local Securities

(By Indianapolis Bond and Share Dorp. ‘The: following quotations do not resent actual bids or offerings, but SL indicate. tHe appro! Ximate market jevel on. buying and seiling ' inquiries or

BONDS (TH) 418 61 S128 +43

STOCKS AB c Hrewing to com 1% Rail Ss TY so RS8SY pu gout Ind

New Bond Issues

(By Lyons & Co.) Ato Tel 4s 33 . 8B & UU 48 ed

went ail. das Go : C&O 3s "9 vhiclgo va Be Tes ’63 Cul West ant 4% win Va Term a -.. vieve leg 1uus 374s ‘od Cleve ‘Lcacior 5s 48 yuuinbus railways 4s '65 . Cull 1uvest ‘Liuse 32s “ol lvl Lonn saver rr & Lt sas 61. S00 ve Cousonudeed Ou 3%s ol .... ® ved rower d%as '70..1uvela 1,

and rugs received for cleaning. The Santonaa PEE 4s

old building is to be used for the manufacture of carpets and rugs. Mr. McKelvey and Osborn F. Kell

established their partnership in No- | {05

vember, 1025, in a garage at 5368 Winthrop-av. They now employe

** 1 6-at. crate. S185. Bi s—Transparents, $1.60@ ; vireiais Winesape: 2% in, $3. He ans Fiat (11s and 13s), Toe, Blaine corsa. 30 Ibs, T8¢. Peaches Alabama, Pibertas, 2 In, 4 bu. $1.90.

pricots—15-1b. 1.65. Plums—Red A ti Sh : $3.35. Grapes—

ee 25-1b. crate. $5.25.

GENTINYER] =F

roar Boost Reported ‘in| x T

The general courses of the deflation ‘and

ee ee 1h pene

sly, together by bonds ee our largest 1 to this country.

‘recovery countries have mun almost side by side. In the. recovery

Ca has United States Industrial United Statés with: stock.

‘at a relatively steady pace, Tr i our course has met with more uncertainties. production during the last. year gained 16 per cent in the Canada

increasing 1132 per cent. Our

production : as measured by the Dow-Jones average of 70 stocks, went

SP 31 per cet the past yea, while Canadian stocks went up 34 per cent.

"STOCK MARKET WEEK IN REVIEW

BY ELMER C. WALZER United Press Financial Editor

NEW. YORK, July 20.—Stocks mounted: to ‘the ‘best: levels of .the year last week. The industrial average reached a new high since 1931. Rails and utilities were the best

| since. 1933" in their. respective av-

erages. Trading increased. Sales on’ the Stock Exchange ‘were the highest for-any week since the week ended May:2 and except for:that they were the best since the week of March 21. + Meantime business continued at a

better than seasonal pace, keeping

the year’s total output to the best levels since 1930. - Automobile manufacturers predicted they would have the best: year since 1929. Electricity

output set a new record high, bring-

ing out the prediction. that it soon would be necessary to expand plants.’ Steel operations rose more than a point. ~ Car loadings were at a hew high for the year. Wholesale trade jumped 20 per cent above 1935 and retail trade was up 12 to 15 per cent ‘over a year ago.

Bonds Were Unsettled

. While" stocks were making new highs, the bond market was. unsettled by a break-in United States Government issues. - The obvious

reason for: that.decline was a move

of the - Federal Reserve in raising reserve’ requirements: as. of Aug. 15. Traders concluded it might ‘be necessary ‘for some hanks to sell gove ernments : to bolster - reserves. and they dumped ‘holdings with: the decline resulting. = Bond expe held this fear was ungrounded ahd predicted early. return to equilibrium. In stock market ‘circles the rise in reserve réquirements was variously received. Most observers felt it would have little influence un-

less. money rates hardened. The

Reserve Board said it did not an-

ticipate any change from the easy 103 ' ymoney situation. - Bankers pointed

out that even with the rise in requirements, excess reserves of the system after ~ Aug. 15 would be around $2,000,000,000, a leve] never seen before the past year or so. Commodities had a bit of reaction after their recent advance. The rise in grains subsided as rains moistened the drought area. Cotton futures had a sizable setback on “technical grounds. Losses were noted in sugar,’ coffee, cottonseed oil, rubber and silk futures. Gains

: were ‘made. by: hides, -cocod,: lead,

copper’ and wool. Increased prices for’ copper, incidentally, afded the market for copper shares. "

| Earning Reporis Favorable

Earnings for the second quarter appeared in greater profusion and most “of them “appeared ° favorable. However, some confusion resfilted from inability ° to make accurate

comparisons because of inability of

many of the companies to compute

09% | tax requirements under the new tax

bill ‘which has not yet been clari-

fied by the Bureau of Internal Revenus.

Outstanding in the earnings’ column ‘was’ the : Bell System report which showed searning for American Telephone more than sufficient for its ‘dividend requirements. Sizable

¥'4 | gains over a year ago were reported |

by ' the electrical equipment companies, some of the building corporations and ‘utilities. It was estimated that U. S. Steel Corp. would show $1 a share at least earned for

I 2 { the second quarter,

Steel stocks relaxed from the recent pressure and their ability to move up aided the main list. Strike fears seemed to have subsided. MoSOF stocks Tan into Profii-taking but | closed the week little changed. Ralls were: higher. + Johns Manville and International Gement, rose on £0pd

- COACH ORDERS U UNFILLED

99% 3 | Pima speci

SENT, 0, July 20—Unfilled . for .automotive Sulpment Placed wits the Twin Co. oiled 020 as of Ju July 15,

lower. : The ‘bulk of better,

[PORK MARKET

“TURNS # HIGHER

Prices Respond + to Cooler Weather Despite Gain in Receipts.

The break in the heat wave was reflected today in: prices paid for hogs, fat lambs and most classes of cattle ‘offered at. the local exchange, The trend was upward: despite a pickup from the low level to ‘which receipts had fallen late last week. = - An estimated 6000-Hog shipment, together with 90 leftovers, awaited

buyers who were paying 10 cents

more than Saturday for swine weighing 240, pounds and less. Prices were five cents higher a hundredweight on weights ‘between 240 and 260 pouhds. Heavier kinds were steady and packing sows were fully steady to 25 cents higher: -

- Top of $11

Most of the sales in the hog market were for weights from 160 to 250 pounds with ‘values ranging between $10.70 and $11, the latter price being’ the top. Weights from 250 to 280. brought. $10.35 to $10.70; those between 280 and 300 cashed in for $10,15 to $10.35; while heavier kinds brought $9.45 to $10.15. In the lighter divisions, 130 .to 160: pounders: brought $10: to $10.25, and . those scaling from 100 to 130 sold at $9.50 to $10, Packing sows were ‘salable; at $8 to $9.25, with a few bringing $9.25 Producers brought 1400 cattle and 600 calves to the:local yards. Fat steers : and ‘heifers ‘were steady. There .was a fairly active trade on cows which were steady to Strong. Bulls were fully steady.

Vealers Steady: to: Bower.

. Early sales on better grade fed steers and yearlings ranged between | $7.50 and $8.25 with an early top of $8.35 reported. Heifers were generally $6.50 to $7.75. Beef. cows brought: $4 to $4.75. Cutter grades

‘were disposed. of at $3 to $3.55. Sau~

sage bulls brought $5.50 to $5.75 with: a top of $5.85.: ‘Vealers were steady to 50 cents kinds were salable at from $7 to $7.50. Better ‘grade fat: lambs were cashed in at prices from 25 to 50 cents | ‘higher. Lower: grades ‘and sheep were steady. The bulk of good and cHoice lambs brought $9.50 to $10. Fat.ewes were mostly $2.50 to] ih with a’ top of $3.25.

+ HOGS Jul Sg Bulk, 14.0 malin 15." 16. 10. nolan : ] Te 11. ° $10.50. 11.15 vv dP 18." 10.90 .. 1090 - 20. - Joes 11.00... . 11.00 Light lights: : . 110.100) G Good: and ‘choice. 910.30

iad 5 2000

10.95 iN soeina [email protected] Lightweights: {160.180) Good ‘and ‘choice. . 10.98 | 2 11 10. 1080 Medium NE oBhie: = : (200-220) Good and -choice.. (220-250) Good and choice. . Hewtywelshts: Par 290) Good. and. choice:. 1918 (290-350) Good and choice...

11.00 10.95

10.80 10.60

10.80 0.25

38858

RoI 83382

5 sas 2 sats

. 10.70 10.95 | 103 13

today ; University Bureau of Business Re search. “The improved condition of trade debits,” the bulletin said. “Total

above May and 19 per cent larger than a year ago. Bank

were substantially above last year.

per cent larger than in June of last year. Newspaper advertising was lower in June than in May, but| gen declined less’ than ‘the usual sea-

17 per. cent above June, 1935. “Livestock handled through: the Indianapolis market increased considerably over May. Percentage figures indicated that total receipts were 156 per cent larger than in May and 23:per cent larger than in June ‘of last year. The greater| ,

expansion, in the number of hogs received.

of permits. issued and in contemplated square feet of floor, space, rose ‘sharply over May. The value of building ts was. approximately 10 per cent greater than in May and more than ‘bwice that, of June, 1935. :

"Heavy Industries Recover

Fhe bulletin reported employment. pay roll and business gains from practically all sections of the state.’ “State , reports carried statistical “proof that business was not only much better than at: this time last year, but that'in most instances;

the review said. “Significant in the record of the month was: the expansion of the socalled ‘heavy industries... The iron and steel mills in the state had the best ‘month since June,: 1930. The mills in the Chicago area stepped | Ii up their operations during the month but made little headway in their rising backlog of orders.” ————————— en

1936 TOBACCO CROP

Yield: Expboted to Fall 19 Per Cent Below Last Year, By United Press : RALEIGH, N. C. July 20. The 1936 tobacco crop, buffeted by nearly" every. adverse weather condition nature could devise, is to be at least

than 1 per cent-over last year, ad‘vance ‘estimates showed today.

South Carolina revealed a total estimated 1936 production of 625,000, -

states in 1035. Approximately 878,-

debits for the city were 10 per cent |

“Postoffice receipts were about 15]

sonal amount, consequently it was

“Building, both in terms of value :

contrary to the usual seasonal swing, | Af business was better than in May, 1B

ESTIMATE REDUCED 3

Am Tig 3 AT Steel Pdy..

and industry was reflected in bank |'5

did not gain as much as debits but.| & Motors

Studebaker E Yellow Truck . .s 20

part of the increase in'live stock shipments was due to a substantial | 4m Smelt

Int Ni ‘Nickel.

43 eg Mine. .

St Joe ‘U8 Vana ER fe Crosley Radio .. Fox: Theat ...:..

Warner. Bros . oo 11 Tobaccos-—~ - An Sum ‘Tob.... 22% Am Tob (A). 100 m Tob (B)....102 tin &- Byres EF “io

betitiard rris . 98 Shyer 51 (8) 85% Raili—

Ch I : Chi & Gt. w td 8 CM&StP.. 1% CM&StP pd 3% Chi: Ne Ww 3 Dela & Hud.. Del * Lac & W.. a “Norihern i nH i Lehigh Valley: . Lou Nash N ve

7s abash 5 West Maryland. . ‘Equipments— 1 Am: Brake Shos. 9% Am Car Bret

. 31 / ald ‘Loco

Am Tk Car 84Vs

ES ow Pullnan Inc ‘West Air Br6.. Westingh Elec .. Utilities—

19. per cent smaller than the 1935|Am & For Pwr crop in four leading ‘tobacco states, AT&T despite an- acreage reduction of Jess

A survey of the anticipated yield | Int in ‘Virginia, Georgia, North and |

000 : pounds, ‘as compared to 806,- 4 000,000 pounds produced in-the four

000 acres are under tobacco cultiva- | Std Gas states,

tion in the four south while: last year 885,000 acres were devoted . to the: crop which, with

roducer. Heavy ‘rains. and cold ‘weather, in

00 | early springs, severe drought condi- | U

tions later, hail and mould were| blamed by and farmers for the drastic reduc-

cotton, is. the South’s best money- )

‘agricultural authorities | a

\m oh & Bdy tion in the yield of land Planted | to] Nehs A J 1

tobacco.

TEACHERS KEEP UP

Times Speciat - FORT: WAYNE, Ind, July 20.— Teachers hold to the life insurance

they. buy more strongly than any Eanes

INSURANCE POLICIES Ed

Underwood E | Worthing’n Pmp

vs 48% . 19%

27% : 3

———

= rd

gas goliane

oN 8 8

at TE RES

a a x

wae ua 33 be

Oa FER

2 | op

i 53 Py 1

SEE

aid 0%

Eo 3 Beds $i

z @ gs o F

or ra SE

tinue favorable, the: editor of

3s | this year 04 3% | “With industrial activity

S Manville: Ha T4507 Owens Gls: 63% Ulen Cons

<o 14% 35 20% 23

.. 479 Lo 24%

ta «Ha

Amer Woolen ..

Gotham H

BATT, OVIDEND

FULLY EARNED

a’ | Bell System’s Quarter Net

Covers Payment on

Parent's Stock. *

Times Special NEW YORK, July 20 —Rarnings of the Bell Telephone System in the

% three months ended May 31, 1936,

. more than enough to cover dividend requirements on the American Telephone and Telegraph Co. This was the first time in the last

4% five years that this has been the C >

Throughout the depression the $9

‘annual dividend rate of the parent

American Telephone and Telegraph Co. has been maintained by dipping

21 2 into surplus funds piled up during 8% | prosperous years.

For the three months ended May | 31 the American Telephone and Telegraph Co. and its 23 associated telephone companies showed a net income applicable to - A. T. & 'T. stock of $45,196,739. This equals $2.42 a share oh the 18,674,618 average shares of A. T. & T. stock out-: standing. . Compares With $172

|. During .the comparable three months of 1935 the net income wag

$32,153,385, or $1.72 g share, the report of Walter S.: Gifford, president showed today. ‘As for- the parent holding company .alone, A. T. &. T. showed a net income for the quarter ended June 30 of - $36,831,687, ' which is, however, subject to minor changes when final figures for June become avaliable. : This equaled $1.97 a share on 18-

A 674,618 average shares outstanding during the period. For the June}: quarter of 1935 the. net income was |.

$28,873,527, or ‘$1.55 a share. The indicated net income of A. T. & T. for the half-year of 1936 was. $7,279,565, or $3.81 a share on

331; | the common stock. For the compar-

2giee.

prem gar

able six months of 1935 the net ineome: was - $58,070,815, or $3.16 a Si e. -

Chicago Stocks waa sd Investors

BastianBerghe

Prey. . close. “12%

Pul 3 Z £

New York ork Curb

~ (By Atkins, Hamill & Gates)

suf n

~ 25

12 | index standing - at. 75.8,

CE ie

A. $60,000,000,000 national : against - $52,585,000,000 1935 is ee re by the m the: best level ‘since 1930, pay pal expanding, dividends Bec, liberal, and prices either firm

The publication's business b eter declined slightly last w

«with 76.5 a week earlier. Last

step-up in’ banks’ reserve ments, The device was termed cautionary, “taken so as to mi unnecessary to clamp the Hd on credit later when it might dangerous.” : Last “month, ‘according Pe: magazine, ordinary - life insu sales bettered last year’s vol the first time this year. “Ind insurance has been ahead of every. month except January,” article said. “Group augurated 25 years ago, sh six months’ gain over the first of 1935 of 29 per cent; ind insurance was 5 per: cent while ' ordinary life lagged 7 cent despite the good June s| : “Steel companies are com business booked last month, find July demand sufficiently to warrant main mill ules at a fair price for the k of the month, with something over to cushion the August | - eonstruction, and ‘buying continue’ in good volw

“Automobile sales were last month that assembli uled for: July and August boosted. July now looks like 000-car month against an .e 475,000 for June. “The heaviest volume : projects of the year and the est volume of home’ co

| since May, 1931, lifted June

struction totals to $233, per cent better than Ma: per cent ahéad of a year “Recent. rains in large of the drought area have some relief to farm crops, losses in some sections are able. Whether - farm - p power gs a whole will suff open to question, since lo. 4 some ‘areas may he offset by § ; in other areas. Farm ] the first five ‘months of 1936 the best for the period: since

Store Gains Unexpected

‘“Retail buying in June in variety. and = department showed unexpected gains May. Rural and grocery sales close to the May level. Buy: ing “to ‘wholesale markets ‘in usually large numbers: were freely - of ‘even high-priced chandise. Stocks were low. ment stores last month, 1 ample, were doing 80. per the averagé 1923-1925 volume only 66 per cent of the that period. - ; ' “An increase of almost 5 pei in "food costs between: N

further thoreite Th

food expenditures can

for the current month in recent increases in fresh

July iiegenes 108 (OEE EEE vw 1. cede svue 1