Troubles

Ill abed last week lay plump and matronly Widow Alice Foote MacDougall who, at 65, owns eight restaurants (seven in Manhattan, one in Rye, N. Y.), sells her teas, coffees, cocoas, jellies, relishes, pickles and preserves in some 300 stores. Two months ago she made plans to offer stock in her enterprise, to expand (TIME, March 7). Apparently little stock was sold for last week Mrs. MacDougall heard that "friendly" receiverships had been granted for four of the affiliated restaurant companies of Alice Foote MacDougall, Inc., her holding company. Blamed in the petition were the Depression and "a change in the public's taste," also the fact that because of ill health and advancing age Mrs. MacDougall has not been able to supervise the restaurants personally. Not affected is the coffee business, handled by her son Allan MacDougall who, together with Irving Trust Co., was named receiver last week for his mother's four embarrassed companies.

Cities Service. Three weeks ago Henry Latham Doherty celebrated his 62nd birthday by resuming high command of the Cities Service organization (TIME, May 23). Stockholders who expected immediate benefit were disappointed last week. Mr. Doherty's first public pronouncement was that all Cities Service dividends must cease, as well as those of four big affiliates--Cities Service Power & Light, Empire Gas & Fuel, Arkansas Natural Gas, Louisiana Oil Refining Co. Affected by the retrenchment are some 650,000 shareholders many of whom, owning preferred shares, expected preferential treatment in the dividend policy. Total omissions would save the company some $20,000,000 annually. Its present position is about $28,000,000 in cash against $56,000,000 in bank loans. Mr. Doherty stressed the fact that the banks are not pressing for payment, blamed the omission on Congress' "punishing the rich" with higher income taxes which make investors turn to tax-free securities. Dashing from meeting to meeting he stopped to meet newshawks and make his announcement, commenting: "It seems to be in the air in the whole banking community that it is a reckless thing to continue to pay dividends."

On the news, Cities Service common stock dropped swiftly from $3 3/8 to $1 7/8|, $6 preferred from $31 to $14 3/4 and 5% debentures from $32 to $20.

Others. Notable dividend actions of the week included omission of Montgomery Ward's cumulative "A" stock dividend, reduction of General Electric's payment from 25-c- quarterly to 10-c-, reduction of Swift & Co.'s payment from 50-c- quarterly to 25-c-. National Electric Power Co., holding company for Samuel Insull's eastern properties, passed its preferred payments.

Mushrooms. Said the New York Herald Tribune: "Owing to the inexcusable conditions obtaining at present with respect to the finances of certain mushroom companies the impression is being created in some uninformed quarters that there has been a total breakdown in corporate business acumen. This is far from being the case, as the liquid cash position of the premier American corporations and their continued willingness and ability to discharge their duty to stockholders and creditors indicates."

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