Downtown

P: Jesse Jones has a flock of "double blue eagles" that he wants to give to banks which will sell capital securities to the R. F. C. (TIME, Oct. 23). Jesse Jones wants the big metropolitan banks particularly to win his double blue eagles so that the small banks, which really need fresh funds to qualify for the Government's deposit insurance scheme, will not be bashful about stepping up to the R. F. C. till. Last week the 19 big banks of the New York Clearing House Association, which gave Jesse Jones the bitterest opposition, suddenly decided with a fine lack of enthusiasm, that they wanted their double blue eagle after all, and as a body promised to sell preferred stock or capital notes to the Government--perhaps as much as $200,000,000. With more funds than they know what to do with--safely--the Manhattan banks estimate that their capitulation to Mr. Jones will cost them at least $1,500,000. They will borrow from the R. F. C. at 5% (4% if retired within three years) and then promptly invest it in Government bonds yielding anywhere from 3.32% to 1/20 of 1%. Financial Editor Ralph Hendershot of the New York World-Telegram mused: "The change suggests that perhaps some rather high-powered arguments were used to drag the New York banks into line. Perhaps they were told . . . that the Government, if forced to do so, could easily enter the banking business. . . ."

P: After three years of desultory dickering, plans for the merger of Standard Oil Co. (New Jersey) and Standard Oil Co. of California were definitely dropped last week. The huge merger would have created a $2,500,000,000 corporation, controlling 10% of all U. S. crude production, 18% of all gasoline sales. In their joint statement Stanco's Teagle and Sococal's Kingsbury gave no explanation, but it was an open secret that the immediate cause was failure to agree on terms. Oil men thought, however, that a more potent reason for abandoning the deal was the question of price-fixing, which had not only split wide open the oil industry but the happy Standard family as well. Mr. Teagle is price-fixing's ablest and loudest foe. Mr. Kingsbury is one of the Administration's heartiest supporters.

P: Fortnight ago Railroad Coordinator Eastman tried to tempt steelmakers with a particularly luscious looking apple: an offer by 47 railroads to buy 844,000 tons of rails and 245,000 tons of rail fastenings (TIME, Oct. 16). There was a serpent beside the apple, however: the price of rails must be reduced from $40 to $35 a ton. Having pondered, the six U. S. makers of rails (Carnegie Steel, Illinois Steel, Tennessee Coal, subsidiaries of U. S. Steel; Bethlehem Steel; Inland Steel: Colorado Fuel & Iron) last week decided that the apple was tempting enough to warrant swallowing half the serpent. They posted a new price of $37.75 a ton.

P: Faced with the "fact that the expense of passenger train operation is being materially increased by the increased cost of fuel and other supplies under the various NRA codes," the Eastern railroads last week turned down the proposal to reduce passenger fares (TIME, Oct. 23). Eastern railroadmen argued that their average fares were already lower than the basic 3-c- a mile lately adopted by the Western carriers (presumably because of cut-rate commuters' tickets), that in any event they wanted to see whether fare-cutting in the West actually boosted passenger revenues.

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