Downtown
Last week in business districts throughout the land the following were news:
P:A liveried chauffeur in a limousine drove to Sing Sing prison and delivered a small oriental rug which was spread on the floor of a cell occupied by Saul Singer, executive vice president of the late Bank of United States (biggest U. S. bank ever to fail), serving three to six years for fenegling with the bank's funds. The same day trial began to recover assessments of $25 a share from 170 stockholders of the failed bank, and Mr. Singer faced the prospect of a temporary vacation from his soft-carpeted cell to testify.
P:Bell Telephone Securities Co. abruptly stopped selling American Telephone & Telegraph stock. Set up ten years ago when A. T. & T. wanted to enlarge the number of its stockholders to 400,000 (number of A. T. & T. stockholders is now 700,000), the Securities Co. took orders from small investors, bought A. T. & T. stock in the market to fill the orders and resold it in small lots, generally on the instalment plan. Reason for last week's sudden cessation of business was the new Federal Securities Act (TIME, June 12) which even great A. T. & T., equipped with the best legal advice and famed for publicity of its operations, viewed with fear. Bell Securities will resume operations when and if it finds how it can do business under the law without undue risk.
P:Just as John Davison Rockefeller Jr. used his influence as biggest stockholder in Chase National Bank to mold its policies to the temper of the times, so last week did his son-in-law start to trim his Investment Trust Equity Corp. to fit the New Deal (TIME, June 12). As a step toward simplification, President David Meriwether Milton made an exchange offer for the publicly-owned stock in one of his subsidiaries. With the offer went a clear promise to register the company's stock with the Federal Trade Commission as soon as the new Securities Act allowed, and a detailed 12-page prospectus. Bearing no hedge clause, it startled Wall Street with the statement: "No dealer, salesman or any other person is authorized to give, and no person is entitled to rely on, any other information or representations than those contained in this prospectus." Estimated expense of the exchange: $50,000, of which $15,000 is for preparation and filing of the registration.
P: In San Francisco President Harry H. Fair of Pierce, Fair & Co. announced that his firm was retiring from investment banking because it has been "legislated"' out of business by the Federal Securities Act.
P:More than once the target of bear raids, Chicago & North Western Ry. was reported one day last week to be contemplating bankruptcy. The stock tumbled from $8.75 a share to $3.50. Within a few hours the reports were denied, the stock snapped back to $7.50. The New York Stock Exchange promptly started an investigation. But there was real ammunition for bearish rail operators in the fact that Chicago, Rock Island & Pacific did slip into bankruptcy, and Atchison, Topeka & Santa Fe cut its preferred dividend from $5 to $3, first reduction since 1901. Bullish operators joked about Baltimore & Ohio's new-found source of revenue: leasing a locomotive to a Pittsburgh brewery as an auxiliary boiler.
P:Loud was the talk last fortnight that Postal and Western Union would soon cease their costly competition for the country's telegraph business. Authority for the merger (now illegal) was contained in a rider to President Roosevelt's railroad bill. Stock of International Telephone & Telegraph which owns Postal soared from $12 to $21 a share.* The rider was killed in conference, largely, Washington heard, because of the bitter opposition of Radio Corp. which depends on Western Union for its pickup and delivery service and which was left out of merger plans. Wall Street, however, believed that by the end of the next session of Congress Western Union and Postal would be one.
*One possible saving: rentals on nearly 2,000 duplicating offices.
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