The Los Angeles Times from Los Angeles, California • 50

'rTe I'T1 v- 1" Major Banks Jdin Move to Increase Prime Rate usiness finance 12 Part III FRIDAY, JULY 1, 1966 Auto Market Downturn Cuts Retail Sales Pace U1.IL.I '1111 IIIUIIU'IMMII UHIIII. LJ Jl IIUJ ll.IIIIMPt.IWI mil. .1,1.1) I II I 4) 11 1 JL Hill H. H. Jl IM MUIU 11 i imit I wmMmmmmt'MimmuimSmMmmmmuammmi 91 90 39 EES 88 silt 85 1 -( 84 1 1 iHM MM WM 83 iNMuijis 520 527 t3 tIO 617 624 71 WEEKS ENDING YESTERDAY 4fc Crocker Executive Questions Impact on Credit Demand BY THOMAS W.

BUSH Timet Staff Writer All major banks across the nation which hadn't done it Wednes day boosted their prime lending rates to 534 from 5V Thursday. Big Los Angeles area banks which announced the rate boost include Bank of America, United California Bank, First Western 'Bank Trust Crocker Citizens National Bank, Security First National Bank and Union Bank. The prime rate is that rate charged the banks' most creditworthy customers. An increase in the prime rate generally means interest rate increases for all loans a bank makes. The rate increases are effective immediately.

The newest round of higher money costs started late Wednesday when Chemical Bank New York Trust Co. raised its prime rate to the higher level. Other banks across the coun- try immediately began following the move, but the surge didn't really get under way until Thursday morning, due to lateness of the initial announcement. Highest in History The increase is the third prime rate boost in a little over six It went to 5 14 last December and to 5Vi in March. The new rate is the highest it's been since the prime rate concept came into use in the 1930's.

An executive of Crocker-Citizens in Los Angeles said he hopes the increase in the prime rate will slow demands for loans for capital expansion. However, he noted that when the rate was raised to 5Vi in March, "we didn't see much of a slowdown. Demand for commercial loans is still pretty brisk." But he said the cumulative in- crease of half a point in the prime rate since March may have the desired effect. "If I were treasurer of a corporation I'd certainly sharpen Please Turn to Page 17, Col. 4 A REAL HIGH FLYER Robert J.

Willis, a painter for Trans World Airlines, gets in Fourth' of July spirit as he stencils the American Flag high on the tail of a StarStream 707 jet "resting" between flights. UTILITIES Delay Seen iri PC Decision on $2.2 Billion Gas Case BY RONALD J. OSTROW Timet Staff Writer Market Rocked at Start, Recovers for Minor Setback BY ROBERT SULLIVAN Timet Staff Writer The stock market was slapped down hard in early trading Thursday, then recovered most of its loss before the close. News of another round of higher interest rates on loans (several leading banks around the country raised their prime rates to 5 from 5i) caused some of the selling in the morning, brokers said. Investors also were jittery because of the latest U.S.

air strikes on North Vietnam. Chartists, however, found a germ of encouragement in the manner in which the averages challenged their closing lows of last May, met support and started back up. The chartists maintain that if the Dow Jones industrial average can resist breaking its earlier low on a closing basis that a substantial rally could ensue. The danger zone is still too close for comfort, however, and technicians say the next few days will be critical. Low Reached May 17 The DJ was off more than 9 points at one time Thursday, but late price strength cut the loss to only 1.50 (0.17) as the Dow closed at 870.10.

The year's previous closing low was 864.14 on May 17. Standard Poor's index of 500 stocks was off 0.12 (0.14) to 84.74, or 1.11 above its May 17 low of 83.63. The Dow utilities index was down 0.24 (0.18) to 131.60. The dip marked the 11th consecutive daily decline. In spite of the late upturn of prices, declines on the New York Stock Exchange outnumbered advances, 775-373, and there were 174 issues which touched new lows for the year, compared with 7 new highs.

Volume on the Big Board stepped up to 7.25 million shares, compared with 6.03 million on Wednesday. Sperry Rand Gains Sperry Rand was the most active stock on the NYSE and ended with a gain of 1V6 to 26 as 207,100 shares changed hands. Douglas Aircraft, under pressure for the past week because of an unexpected drop in earnings, was off Wi to 63V6. It was the second most-active issue. General Motors touched a new low for the year at 80 Thursday, but ended the day with a net gain of to 80.

Chrysler was down to 39. Airlines continued to be one of the Please Turn to Page 17, CoL 4 SEAT ON PACIFIC EXCHANGE HITS RECORD $40,000 A membership on the Pacific Coast Stock Exchange changed hands Thursday at a price of 000, highest in exchange history and up $2,500 from a previous sale this year, Thomas P. Phelan, exchange president, announced. Carl M. Loeb, Rhoades New York-based brokerage firm, purchased the membership.

Seats on the PCSE have shown a sharp price increase in the last 15 months, having risen steadily from $7,500. The current offering of a membership is $50,000. the Fremont could double even triple our net profits." Stockholders also approved, as a part of the transaction, a plan to give five owners of the Fremont the right to buy 125,000 shares of Parvin at $14 a share. Parvin currently sells on the American Exchange at $20. Parvin officials explained that when the deal was made, Parvin stock sold at $11.50.

Purchase of Las Vegas gambling casinos by publicly held companies is, in effect, prohibited by Nevada law. Harvey L. Silbert, Parvin vice president and treasurer, explained the method the company used in the acquisition: It set up a dummy company, with approval of Nevada gaming officials, which would be owned by the Parvin company, with Parvin officials as gaming license holders. The "fictional company," as Silbert described it, is to collect all of the casino's profits as rent. Silbert predicted Nevada law will Please Tarn to Page 17, Col.

1 lion issue this week in time to facilitate the still-unconfirmed July 1 departure of David S. Black from the five-member commission. Black reportedly will be named head of the Bohnevlle Power Commission. His anticipated move, which has been neither confirmed nor denied, would be part of a three-way personnel switch. John A.

Carver, undersecretary of the Interior, would replace Black, and Charles F. Luce, who now heads the Bonneville commission, would succeed Carver. There has been neither confirmation nor denial of these transfers. 'Sources who predicted that a decision in the gas case would not be made until the second week of July noted that both Lee C. White, FPC chairman, and Commissioner Carl E.

Bagge are away from Washington and are not scheduled to return until July 11. In addition, the FPC has stated that it intends to notify the press 24 hours in advance of a decision in the four-year-old proceeding. No notice was issued Thursday, and with government offices closed Monday for the July 4 holiday none could be issued before Tuesday. At issue is the question of which group of companies will supply Los Angeles' two electric utilities, Southern California Edison Co. and the Los Angeles Department of Water Power, with an estimated $2.2 billion worth of natural gas over the next 20 years.

Gulf Pacific Pipeline subsidiary of Tenneco, is asking the commission to uphold the December recommendation of an FPC examiner that it be authorized to build a $314 million pipeline from Texas to Los Angeles. The line would supply the electric utilities with fuel for generating electricity. The electric companies support Gulf Pacific's proposal. Edison has an option to acquire 25 of Gulf Pacific's stock. El Paso Natural Gas El Paso, and Transwestern Pipeline Houston, the present suppliers of out-of-state gas, have urged the commission to reject the report and to select them.

RETAIL STORE SALES last week totaled $5,773,000,000, down nearly 3 from the preceding week, but up 6 from the year-earlier level, the Census Bureau estimated Thursday. The 6' gain trailed the average 7 year-to-year increase of the past four weeks. Sales of durable good3 at were down 1 from a year earlier in contrast to a 3 average advance in the four most recent weeks. Sales in this category, which includes automobiles, declined from the prior week's $1,943,000,000. Non-durables volume, at rose 9 from the year before, matching the average gain over the past four weeks.

The figure compares, however, with a week earlier. Furniture and appliance sales rose 20 from the 1965 period, the largest year-to-year advance. Sales in the automotive group declined 5 from 1965. Other economic indicators released Thursday showed: The nation's railroads carried 15.2 billion ton-miles of freight last week. The previous week's 15.5 billion figure was a 22-year high.

Last week's volume was up 6.2 from a year earlier, the Association of American Railroads said. Soft coal production last week amounted to 11,255,000 tons, the National Coal Assn. said, up from the 10,412,000 tons of the' corresponding period last year, but down from the previous week's 14-year high of tons. Intercity truck tonnage in 34 metropolitan areas last week was up 10.5 from a year ago and 0.6 higher than in the prior week, the American Trucking Assn. reported.

DEFENSE: Hughes wins contract for NATO air warning system HUGHES AIRCRAFT Culver City, as leader of an international consortium, has been formally awarded a $280 million contract to build a vast air defense early warning system for the North Atlantic Treaty Organization. About $80 million of the contract will be spent in -the United States, Hughes said, with this work to be performed in or contracted out of Hughes' Fullerton facilities. Other participating countries will receive contracts in the amount of their contributions to the system. Hughes said Thursday it would be "premature" to say that receipt of the contract would increase the company's employment in Fullerton. PRICES: Johns-Mo nriHe backs down on increases for floor tiles JOHNS -MANVILLE New.

York, Thursday said that its previously announced price increases for asphalt and vinyl asbestos floor tile products have been rescinded. Other tile manufacturers who previously announced increases, which were to become effective today, followed the lead of Johns-Manville. SECURITIES: Fees established for broker-dealers outside NASD THE SECURITIES Exchange Commission announced Thursday adoption of a fee schedule for brokers and dealers who are registered with the commission but not members of the National Association of Securities Dealers. The schedule includes $150 for each broker or dealer, $7 for each associated person engaged directly or indirectly in securities activities and $30 for each office open any time during the year. In no case will any broker or dealer be required to pay more than $15,000 under the first two fees.

The schedule stems from Securities Act amendments passed by Congress in 1964 directing regulation of non-member brokers-dealers similar to that imposed by the national association on its members, and authorizing fees to cover the cost. RAILROADS: ICC to consider $2.50 daily fee on borrowed cars THE INTERSTATE Commerce Commission 6aid Thursday it will consider setting a charge on the use of borrowed freight cars In an effort to ease the nation's freight car shortage. Congress recently voted the ICC authority to es- tablish charges to be paid by a railroad for using another's boxcars. The charge would be in addition to current fees levied by the Association of American Railroads which range from $2.16 to $7.74 daily. Present fees for borrowed cars have been blamed for discouraging railroads from expanding their fleets.

INSURANCE: Two large casualty firms study possible consolidation HOWARD C. REEDER, chairman of Continental Casualty Co. and Continental Assurance both of Chicago, and J. Victor Herd, chairman of Continental Insurance New York, announced Thursday that studies are being undertaken to deter- mine "the feasibility of a mutual in- WASHINGTON The Federal Power Commission probably will not decide what firm will supply additional natural gas to Southern California until July 11 or later, despite persistent rumors that a decision Is imminent, sources indicated day. According to the rumors, the FPC was expected to resolve the $2.2 bil- Equitable Savings Acqu ires Assets of Van Nuys Equitable Savings Loan Long Beach, has acquired $120 million of assets the bulk of Van Nuys Savings Loan and Charles A.

Wellman, formerly president of First Charter. Financial a Beverly Hills savings and loan holding company, has been elected president, of Equitable, it was announced Thursday. Wellman succeeds Thomas Gregory as Equitable's president and chief executive officer. Equitable acquired the assets, which include $100 million of prime real estate loans, $20 million of cash, securities and branch facilities in Van Nuys, Reseda and Panorama City, in consideration of assuming $120 million of savings accounts in Van Nuys. Other details of the transaction were not revealed.

Abner Goldstein, deputy state savings and loan commissioner, commented that Van Nuys had reached a point at which it had the alternatives of having to "either recapitalize, merge, sell some of its assets or take some other action. It chose to sell some of its assets." Will Retain License He explained that Van Nuys will retain a valid savings and loan license, but that it won't solicit savings funds. He said that among the assets it has retained is real estate owned through foreclosure. On March 31 the association reported its scheduled items amounted to 26 of its loan portfolio. The average scheduled items figure for state chartered savings and loan associations in California was 5.65 on March 31.

Real estate owned through foreclosure at Van Nuys is said to total about $50 million. The association also is understood to have some $50 million of Federal Home Loan Bank loans outstanding. Among other assets retained by Van ys, it is understood, are some $10 million of cash, government securities and certificates of deposit It was also learned that the Federal Savings Loan Insurance Corp. has loaned Van Nuys between $50 million and $55 million. The FSLIC, which insures savings accounts for up to $10,000, can make such loans only to save an institution from liquidation.

The acquisition of the selected assets and the savings accounts of Van Nuys by Equitable brings the latter institution's total assets to $294 million. Savings accounts now total million and real estate loans amount to $230 million. United Finanoial a Los Angeles savings and loan holding company, in April had agreed in principal to merge Van Nuys into United Savings Loan Assn. An announcement Thursday said the two were unable to resolve basic questions and negotiations were terminated." NEW YORK STOCKS Standard Poor's 500-stock index Thursday closed at 84.74, off 0.12. Top during the day was 85.37; the low, 83.75.

Volume rose to 7,250,000 shares from 6,030,000. OVER-THE-COUNTER The National Quotation Bureau of 35 industrial stocks closed at 233.76, off 2.25. The 1966 high of 249.11 was set April 27; the 1966 low of 222.26 on May 1 8. LONDON STOCKS The Financial Times index of 30 ordinary shares closed at 371.7, off 0.5. The 1966 high of 374.2 was set June 16.

The 1966 low of 337.3 was made Jan. 5. terest and advantageous working arrangement or consolidation of the companies." Continental Insurance with resources of $1.7 billion is the second-largest U.S. casualty underwriter. Continental Casualty stands in 11th place with resources of $879 million.

Continental Assurance, 22nd-largest U.S. life insurance writer, ia 31.4 owned by Continental Casualty. AGRICULTURE: Holly Sugar plans huge sugar plant in Tracy HOLLY SUGAR Colorado Springs, has announced plans for construction of the largest beet sugar factory in the United States at Tracy. The $30 million facility will have a slicing capacity of 8,000 tons of sugar a day. Construction will get underway next year, and completion is expected in early 1970.

Holly Chairman Russell T. Tutt and Dennis O'Rourke, president and chief executive officer, said Holly's Northern California operations would be consolidated at Tracy. They said Holly's beet acreage program would be intensified in all its Central Valley areas, from Chino to Bakersfield. The Tracy plant will ultimately mean a reduction in Holly's total labor force, they said. AIRLINES: Delta arranges $45 million financing with banks DELTA AIR LINES, Atlanta, has closed a $45 million loan under a revolving credit agreement with 23 banks headed by Citizens Southern National Bank, Atlanta, officials of the airline said Thursday.

The loan is the largest ever closed in Georgia, they said. Funds will be used to finance Delta's jet expansion program. REAL ESTATE: Terrific loss' in FHA resales charged by senator THE FEDERAL Housing Administration "is taking a terrible loss" in reselling repossessed real estate, according to Sen. John J. Williams Sale prices on 51 resold apartment projects showed a 45 loss on actual investment, he said, while there was a 21 loss on the resale of 23,656 homes.

ET CETERA: Random curiosities rumors from the business world PROFITS PROPHETS: Genesco, Nashville, expects to report earnings for the fiscal year ending July 31 about 15 ahead of the $3.71 per share of fiscal 1965 Chock Full O'Nuts New York, expects earnings for the fiscal year ending July 31 to rise to at least 70 cents per share, up froci 65 cents in fiscal 1965 IN PASSING: Rexall Drug Chemi cal Los Angeles, has completed its acquisition of Thatcher Glass Manufacturing Co. Stockholders of Cole National Cleveland, approved a previously proposed merger with Susan Crane Packaging, Inc. Teledyne, Hawthorne, han completed its acquisition of Vasco Metals Corp. More Major Go Up to 5 Passbook Savings A new surge of 5V4 passbook interest rates paid by savings and loan associations appeared to be getting under way Thursday, led by the two giant associations owned by First Charter Financial Beverly Hills holding company; Among the others were Glendale Federal Savings Loan the two subsidiaries owned by United Financial Los An-, geles, Beverly Hills Federal Savings Loan and two of the 11 associations owned by Financial Federation, Los Angeles. Reached in Hayward, C.

W. Ford, 1 president of Great Western Finan-. cial another Beverly Hills holding company, said he will recommend to a meeting of his board of directors today that Great Western's subsidiaries also go to 5V4. He will do so "in view of develop- ments and in the best interests of the company," he said. 5 Ceiling Urged Meanwhile, some managers are sticking to the 5 rate which has been urged as a ceiling by the Federal Home Loan Bank Board in Washington.

A leader among these is Brentwood Savings Loan Los Angeles. Brentwood President David C. Grimes said his position regarding Please Turn to Page 17, Col. 3 BILL TO REGULATE RATES DIES IN STATE SENATE SACRAMENTO (UPD A little-publicized bill to regulate interest rates paid to depositors in California savings and loan associations died in the State Senate Thursday, almost as quietly as it was born. The measure was introduced Tuesday by Sen.

Richard J. Dolwig (R-Atherton) and cleared at once through a hastily-called meeting of his committee on insurance and financial institutions. Backed by the California Savings Loan League, the measure would have given the state's savings and loan commissioner a one-year authority to regulate interest rates paid by the more than 200 state-chartered institutions. Dolwig said he had received numerous calls protesting the mea sure from "individual" savings and loan associations. ACQUISITIONS Parvin Shareowners Approve Purchase of Fremont Hotel BY ARELO SEDERBERG Timet Staff Writer Parvin -Dohrmann Co.

finally owns the Fremont Hotel, a Las Vegas hotel and gambling casino, culminating almost a year of intense negotiations. Stockholders of Parvin, a Los Angeles hotel-restaurant supply and interior decorating company, gave assent to the acquisition, for about $10 million, at a sedate, 90-minute annual meeting at the Beverly Hilton Thursday. Only about 30 stockholders attended; the remainder approved by proxy. The transaction wa3 effective at midnight Thursday. An exhilarated Albert B.

Parvin, president and chief executive officer, told shareholders: "Several times an impasse seemed imminent in the negotiations. On one or two occasions, I was tempted to throw in the towel. Never has there been a venture in my business career more exciting. In three years, I.