Deals & Developments

Lower Rate. Last week the Federal Reserve Bank of New York lowered its rediscount rate from 3 1/2%, where it had stood since Oct. 16, to 3%,. Immediate results were a rise in Government bond prices, a falling off in several foreign exchanges. The former was taken to mean that the lower rate will aid the Treasury in its financing problems; the latter, that Europe's alarm over the dollar has died out. Swiss francs broke especially sharply, probably because much money sent to Switzerland for safety was now being recalled.

Squibb Plan. In 1929 famed E. R. Squibb & Sons, chemists, decided that their druggist-customers should be given participation in the business. No offer of stock was made but smart President Carleton Palmer (also active in Canada Dry gingerale) devised what became Squibb Plan, Inc. Druggists were allowed to buy shares in the Plan for $50, ten shares for each store. The money was used by the Plan to buy shares in E. R. Squibb at the same price. The Plan receives dividends on this Squibb store, is also given a 10% rebate on its members' purchases and 10% payments on their increase in sales from year to year. Out of this income it pays 6% to its members on their investment. The balance is split between E. R. Squibb & Sons and the members, the amount paid to each of the latter being based upon his purchases. Last week President Palmer reported that 1931 net earnings to each Plan member averaged 23.8% of paid-in capital, that for the past two years and three months the net earnings have been 60%. During 1931, purchases of Squibb products by Plan members jumped 23.2%.

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