First Plunge

Ever since the Securities Act was passed last spring Wall Street has been gloomily predicting that a new issue of stock or bonds of a major corporation would be followed by a shower of resignations from officers and directors who would refuse to assume the liabilities imposed by that law. Though some $300,000,000 of new brewing, distilling, investment trust, mining and a few industrial issues have been registered with the Federal Trade Commission, no old-line company, up to last fortnight, had stepped into the stagnant market for long-term capital. First to do so was Mathieson Alkali Works (industrial chemicals and the world's largest maker of chlorine), which quietly filed a registration statement in Washington for $7,000,000 of new common stock to finance a new plant in Louisiana. Said the New York Evening Post last week: "If one large and reputable corporation takes the plunge without catching pneumonia, why can't others do the same?"

Mathieson will issue to present stockholders rights to buy one share of the new stock at $30 (present price: $36) for each three shares they now hold. Mathieson's regular bankers. Hayden, Stone & Co.. will head a group to underwrite the issue in the usual manner. But Mathieson will not know whether its plunge was fatal until after the stock has been issued and shyster lawyers have had an opportunity to start nuisance suits.

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