The Times from Shreveport, Louisiana • Page 30

8-B Sunday, Aug. 4, 1974 THE SHREVEPORT TIMES See 7 Big Firms Surviving Brokers Readying Firm For Wall Street Change A I i A. A iVt iiV Richard Jenrette (right) chairman of the board and axhief executive with me," said Jenrette. "He is superb at long range planning, at ferreting out problems and correcting them, at attracting people. I like to think of us as a good tennis doubles team, each one having special skills.

Special Attributes "Dan is good at the backhand and service return, to pursue the tennis analogy. I am good in other areas of the game, like interfacing with the various divisions." Lufkin, 42, said he went back to DLJ July 15 to "give Dick a hand" and bring new perspective to the operation. "After all, I've been away for more than three years," said Lufkin. "I have to have some new ideas, just being on the outside that long." Lufkin touched on DLJ's strategy for establishing future Street position by noting fundamental changes in Wall Street and saying "it never again will be the same. "No longer is there an excess of capital.

We must look for new and innovative ways to find and attract capital rather than ways to spend or invest it, especially now that the Arabs are sucking money out of our economy." Aside from the challenge, Lufkin said he returned to the multi million dollar firm he, Jenrette and William Donaldson created 15 years ago with $100,000 capital because "my name is still on the door." As he put it, "a lot of the men I brought into the firm still are here. I owe something to them. Besides, I see it as a great chance for social service." Lufkin explained" That by noting that Wall Street often has been referred to as "the blood of the corporate body," the institution that generates and creates the capital business feeds on "I feel strongly that business and government must coexist," Lufkin said. "If the corporate blood dries up, we are on a dangerous course, one that could propel us faster down the road to socialism. That storm, as I see it, is seeding now, and its eye is in the nation's financial sector.

I want to help in any way I can." Lufkin and Jenrette believe that after April, once fixed commissions are dead, a maximum of six or seven firms will evolve and dominate the Street, half of them tending to institutional needs, half to individuals as well as some institutions. They feel that about 100 or 200 smaller firms will survive as "boutique operations with specialized knowledge in very specific areas." Jenrette noted that DLJ began planning its role in "the new Wall Street" four years ago when Lufkin, then a member of the NYSE board of governors, announced that the firm would go public even though exchange rules forbade such action. The board, after some bitter debate, subsequently changed the rule to permit such action and DLJ did go public, a move followed by other capital-hungry houses on the Street. Financial Reports DLJ President Sales, rental and service revenues for the second quarter of 1974 for Honeywell, were $654.5 million, up from $572.2 million last year. Other second quarter figures from 1974 and 1973 are earnings of $21.6 million compared to $20.8 million; and earnings per share of $1.13, up from $1.10 last year.

McLean Trucking a Winston Salem, N.C., firm which operates a local office General Motors Plans to Build a minicar in the U.S. and industry sources say GM hopes to begin production for the 1976-model year. The minicar is the Brazilian-built Chevette (top). The bottom photo shows what it may look like when it is modified to bring it up to U.S safety and pollution standards. (UPI Telephoto) Modified Chevette To Burn More Fuel at 2710 Hollywood has announced operating revenue for the quarter ended June 30 of $86,945,816, up from $63,242,292 in 1973.

Net income in 1974 was $3,906,172 or $1.40 per share. Last year, net income was $3,278,480 or $1.18 per share. Boise Cascade Corp. has reported an income of $31,300,000 before extraordinary gains in the second quarter of 1974. This $1.05 per share is a gain over the $27,590,000 or 89 cents per 1W 1MI Despite Predictions Economist Sees Ample Materials wmm tm 5 i (UPI Ttieehoto) and Dan W.

Lufkin 4i share earned during the same period a year ago. Sales totaled $379,000,000 in the second quarter of 1974. compared to $349,970,000 in the second quarter of 1973. Income before extraordinary gains in the first six months of 1974 was $56,920,000 or $1.92 per share, compared to $43,920,000 or $1.41. per share during the first half of last year.

during the first half of 1974 were to $663,240,000 the same period a year ago. Ppr Yeaf Per Year Quartern Per Vear Quarterly Quarterly I I VII in. 5.39 6.44 tm Per Year MM NEW YORK (UPI) An influential Wall Street executive has predicted "vast changes" in the Street of tomorrow and outlined how his firm ras positioned itself to be one of the "six or seven financial oligopolies" serving Congress dictated changes. The picture Richard H. Jenrette, president of the Donaldson, Lufkin, Jenrette, Inc.

financial services holding company, painted for UPI is a bleak one for some 390 New York brokerage houses. His scenario for the New York securities industry after April, 1975 when all fixed commissions disappear for the first time after 182 years of such pricing practices, calls for over the next five years: Elimination through merger, buy-out or shutdown of all but about 110 of the remaining 500 brokerages in New York. Brokers with large branch office networks com-i peting vigorously with banks, real estate and insurance companies and vice versa. Creation of round-the-clock central marketplaces in such strategic financial centers asl New York, London, Tokyo and Beirut because wealth ir being accumulated outside the United States, especially in the oil kingdoms of the Middle East. The disappearance of exclusive, traditional banking relationships as institutions and corporations search for the special investment skills needed to operate in broadening investment areas.

Business becoming more capital intensive, forcing the dominant brokerage firms to raise capital as well as invest it. Government pressures become more intense and sophisticated. And a world economy taking shape despite fits of nationalism, with multinational companies benefiting. "Wall Street has operated under the New York Stock Exchange's pricing umbrella since 1972 with the Security and Exchange Commission's regulatory approval of fixed commiss ions since the 1930's," explained Jenrette. "Now, next April, the SEC says all fixed commissions are out; rates must be fully negotiated." Jenrette noted that some 700 brokerages operated on Wall Street in the heyday of fixed rates.

But the SEC has been chipping away at fixed commissions for years, banning them first on sales over $500,000 and then over $300,000. In the process, more than 100 NYSE member firms have disappeared since the end of 1969. One reason for the mergers and dropouts, said Jenrette, is the restructuring of the market even before the movement toward negotiated rates. "When we organized 15 years ago," said Jenrette, a balding southern gentleman who speaks quietly but authoritatively, "75 per cent of the securities business came from individuals and the rest from institutions such as banks and pension funds. Today, it's the reverse.

Institutions provide 70-75 per cent of the business." He gave a personal example of how the disappearance of fixed commissions has eroded Wall Street profits. "If the old fixed rates still prevailed today, we would be taking in $20 million more on our current volume," said Jenrette. "Lower commissions and rising costs have squeezed us." In 1973, NYSE members collectively lost more than $50 million because of commission shrinkage and rising costs. So what is DJL's strategy near and long term to become one of the surviving "Big Six" firms? Big Step "We took a big step on July 15 by re evaluating our long term securities in present market terms even though the companies were experiencing record earnings," said Jenrette. "That came to Put your savings where they're COMPOUNDED EVERY DAY.

Use the plan that fits your needs. J40 OPEN ACCOUNT WILL EARN Paid Quarterly OPEN ACCOUNT WILL EARN $150 Minimum Paid Oua-terly CERTIFICATE WILL EARN J7470 700 pounds lighter than the Chevrolet Vega, now the smallest car in GM's U.S. lineup. Industry sources say GM hopes to begin production for the 1976 model year. In tests, GM says the experimental U.S.

equipped Chevette averaged 28 6 miles per gallon, compared with 31.2 mpg for the base car on the same city-suburban fuel economy run. Details of the U.S. version were provided by GM in a paper describing the effects of adding the safety and emissions equipment to a small car produced in several parts of the world. The big styling change is in the front end with the U.S. version sporting a steeply sloping soft bumper with its square headlights recessed deeply.

It is similar to the front end now on the Vega, Firebird and Camaro and the one that will be the trademark of the three new sporty GM Vega-type cars due out this fall. GM is believed to be ahead of its competitors in readying a minicar for the U.S. market. Ford is developing a small car to be built in its new Spanish plant and has engineered it so U.S. equipment can be added if the fuel situation worsens and Americans want even smaller cars.

The two-door Chevette seats five. The model built in Brazil met all government regulations of Germany, Japan, England and Sweden and has a structure adequate to meet current U.S. standards requiring 30 mile an hour barrier impact performance. Major changes to modify the car to meet current and proposed U.S. regulations through 1976 added 315 pounds to the car's weight, enough to result in a 14 per cent fuel economy penalty.

Another 110 pounds might be added if an air bag system is required for 1977 models. Dr. Craig Marks, technical assistant to the vice president in charge of the GM engineering staff, estimated that each 100 pounds added to the car costs the driver about 32 gallons of gasoline a year. "In fuel cost alone at 50 cents a gallon this means that the customer will pay $16 every year to carry around 100 pounds of mandated equipment," Marks said. In a paper presented to the recent International Congress on Automotive Safety in San Francisco in which the modified Chevette was shown, Marks suggested taking a new look at the effectiveness of present and proposed federal safety, emission and energy regulations.

The increased cost and loss in fuel economy and performance demonstrated by bringing the Chevette up to U.S. standards may not truly benefit society, Marks indicated. He said present laws and regulations are administered by at least six different federal agencies. "In most of these laws, there is little provision for tradeoffs, compromise or coordination among the various regulating agencies or even among offices within an agency," Marks said. "The agencies are subject to various public and other pressures, which have often forced changes before adequate technology was available.

"The result," Marks said, "is heavier, less efficient and costlier vehicles than a more orderly process, or the marketplace discipline, would have produced." DETROIT (UPI) The Brazil-built Chevette, the minicar General Motors plans to build in this country, will suffer a substantial fuel economy loss by bringing it up to U.S. safety and pollution standards. Even with the U.S. equipment, the car is about 10 inches shorter an more than Arkla's Income Up Slightly Arkansas Louisiana Gas Co. last week reported a small increase in unaudited net income, before nonrecurring items, for the second quarter of 1974 compared with the same quarter in 1973.

An increase of approximately $4.7 million in net income of Arkla's subsidiaries for the first six months partly offset a decline of approximately $6.6 million in net income of the gas utility operation. The latter decline was due to increased expenses, various gas conservation measures, and to warmer weather, the company said. These figures do not include a net gain in the second quar- ter of $11,805,848 from the sale on April 11 of the chemical fertilizer division of Arkla Chemical which amounted to $1.17 per share, nor 6c per share from earnings of the fertilizer division for the first I 13 months of the year. Net income from continuing operations for the quarter, not including the fertilizer operations, was $10,015,131, or 99c per common share, compared with $9,020,933, or 90c per common share, for the same quarter in 1973. For the first six months of 1974, earnings from continuing operations were $2.38 per common share compared to $2.57 per common share for the same period in 1973.

D. W. Weir, chairman of board, and Sheffield Nelson, president, said that despite the apparent adverse comparison of net income from continuing operations for the first half of 1974 versus the same half in 1973, that the company expects results fro 1974 to exceed 1973 earnings from continuing operations. They pointed out that Arkla earnings for the last half of 1973, particularly the fourth quarter, were substantially reduced due to major, noncash, non-recurring expenses. Dad Will Sue In Boy's Death COVINGTON, La.

(AP) The father of a 17-year-old youth shot to death by a Covington policeman after an automobile chase on July 8 says 'his attorney will file a suit for the "honor and memory of my son." Clyde Metz of Covington, whose son Dan was lulled by a shotgun blast, announced his plans to sue in the wake of a grand jury report exonerating the policeman of any criminal' wrongdoing. Asst. Dist. Atty. Julian Rodrigue of St.

Tammany Parish said the jury heard from about 18 witnesses before making its report. Covington police said the Metz youth's car crashed into a roadblock in a Covington subdivision after a chase through back roads of two parishes. 040 LONDON (UPI) -A study carried out in 1929 by a team of U.S. scientists concluded that the world would run out of tin within a decade. But 40 years and considerable tin consumption later, a similar report indicated that even with vastly increased demand, there still was enough of the metal left to last another 15 years.

That may sound like the story of the loaves and the fishes, but in fact what has happened is that mining companies in the intervening years discovered more tin, while industry found alternates and methods to put the existing supply to better use. Now University of London economist Wilfred Beckerman says a similar situation exists for virtually all the world's raw materials which many experts maintain are running out at an alarming rate. Beckerman argues that conservationists and others who forecast doom for growth economies which require increasing amounts of natural resources are wrong. "From whatever angle one looks at the anti-growth argument, it appears to be riddled with glaring fallacies and oversimplifications," he said. Business Notes Bobby Richardson of Shreveport was awarded a lifetime membership in the Cole National Corporation's Mountaineer Club at the national sales meeting held in New Orleans.

Richardson has been a territory manager for the company for about six years. He was the sole recipient of the award this year, which encompasses professionalism in sales standards, business ethics, and customer loyalty. A former Shreveport resident, Jack W. Humphries, has been appointed manager of men's shoes for Saks Fifth Avenue, Houston. Humphries attended Centenary College and Southern Methodist University.

Minimum 1 Year Maturity -Paid Beckerman makes his case in a book called "In Defense of Growth," published recently in London. He said that throughout history shortages of raw materials have been predicted, but that better technology plus the discovery of new reserves always has permitted supply "more or less" to keep up with demand. When supply falls behind, prices rise, "thereby stimulating further the search for new supplies or the development of substitutes or improved technologies." Tin is one example. Copper is another. At the end of World War II, Beckerman said, international copper reserves were estimated to be 100 million tons.

Since then the annual rate of consumption has tripled and the world has used up a total 'of approximately 93 million tons. "In fact, we now have about 300 million tons left," he said. Most recently opponents of constant growth have raised the oil crisis following the 1973 Middle East war as an example of how raw materials are bound to run out sooner or later if growth is not curtailed. "But the oil crisis proves nothing of the kind," Beckerman said. According to the economist, the increase in oil prices was simply the result of Arab nations banding together to form a cartel.

"Furthermore, various reactions to the rise in the oil price notably increased exploration and discovery of enormous new oil reserves in many parts of the world and increased attention to near substitutes demonstrate the fallacy in this particular argument," he said. The debate or whether to continue using raw materials to supply growth economies simply detracts from the real issue-which is allocation of resources, Beckerman said. "Even if economic growth does not necessarily make, mankind happier, it does increase his range of choice and he can choose wisely or not," he said. 1 basement) concrete rein Company (602) 248-5436 3 CERTIFICATE WILL EARN Minimum 2 Year Maturity Paid CERTIFICATE WILL EARN Minimum 2' Year Maturity rcBTieirAic VUI I I II I h. II WILL EARN Paid $1,000 S5 000 $10,000 712 $10,000 C'KltTIHCATKS WW.

SI 6.600 Per Yea' Minimum-4 Year Maturity-Paid Quarterly ACCOUNTS INSURED BY F.S.L.I.C. UlTIIDIt VN I'KIOK TO M.XTl HITY It.lKCT TO ISCSSJEM FOR SALE REFRIGERATED FACILITY If TEXARXANA, TEXAS Lj i nvn about $6 million and caused us our first quarterly loss. But that puts the bad news behind us, clears the decks for realistic action. Now we can concentrate on the future." The return last month of Dan W. Lufkin, one of the DLJ founders who left the firm three and a half years ago to become commissioner of Connecticut's Environmental Protection Agency, is one reason Jenrette is confident of the future.

"Dan has come back as Two story brick (with Savings 81 Loan Association forced containing approx. 14,815 sq. ft. (6435 sq. ft.

cooler and 960 sq. ft freezer) situated at the corner of Spruce and Front Street. Elevator ser ves both floors and basement One rail and three Bossier City Telephone 746-3370 440 Benton Road Just off I 20 truck docks. Call Armour lnSQ.