The Los Angeles Times from Los Angeles, California • 44

'V tftimmmimetiuKm HUD Freezes I' 'i ling mk mm mm New Dime 11,1 972 fr If i- Loan Processing 2-to-4 Week Southland Delay Blamed on Lack of Personnel, Big Backlog iivj 7 1 11 rt Iv 4" A '-'ix I Oil Pi Ih'1 1 Milium nL. I in Iv.g.i i i tbmtt, small keyboard. The pilot project to speed stock market orders grew out of the securities industry's backoff ice paperwork problems in 1969-70. AUTOMATED ORDERS Two specialists on the New York Stock Exchange floor insert information into automated trading system through use of a Chastened Securities Industry Vows No More 1969-70 Jams Stock Prices Sink in Seesaw Session; Dow Gives Up 4.52 NEW YORK Blue chip stock prices headed definitely lower toward the close Monday after drifting slightly back and forth throughout the session in active trading. The Dow Jones average of 30 industrial stocks dropped 4.52 to 958.08.

A record 1,797 issues changed hands on the Big Board with 735 issues advancing and 735 declining. Advances had led declines by a healthy margin during most of the session. The New York Stock Exchange index of some 1,300 common stocks dipped 0.10 to 60.98. "The market was absorbing profit taking throughout most of the session, and that's only normal after the runup in the Dow average we've had recently," said one analyst. The Dow Jones industrial average had risen some 20 points in the past four sessions.

Standard Poor's 500-stock index was 109.45, off 0.16. Big Board volume was 19.47 million shares, compared with 19.9 million shares Friday. There were 196 new yearly highs and 62 new yearly lows on the Big Board. The American Stock Exchange price-change index rose 0.02 to 28.33. Amex volume was 6.78 million shares compared with 7.15 million Friday.

There were 458 advances and 533 declines out of 1,241 issues traded. Airlines, chemicals, aircrafts, and motors were mixed. Rubber issues, mail order-retail, and rails were higher. All other stock categories Please Turn to Page 16, Col. 7 TUESDAY, APRIL National Retail sales in March advanced 2.5 from February, 8 from a year ago.

The Commerce Department said preliminary figures put March retail store sales at a seasonally adjusted $36 billion compared with an upward revised $35.13 billion in February and $33.27 billion in March, 3.971. Durable goods sales rose to $11.87 billion from $11.35 billion in February and $10.61 billion a year earlier. Sales of non-durable goods increased to $24.12 billion from $23.78 billion in February and $22.66 billion in March, 1971. Interest rates on Treasury bills turned lower at this week's auction. The Treasury Department said interest rates on 91-day bills fell to an average of 3.731 from 3.798 at last week's auction.

The current rate is the lowest since March 6, when fchey were 3.553. Interest rates on 182-day bills fell to an average of 4.223 from 4.367 last week. They are at their lowest since March 13, when they hit 4.195. A total of $2.3 billion of 91-day bills and $1.8 billion of 182-day bill3 were sold at the latest auction. The Fed voted to ease its monetary policy at its meeting in January.

The Federal Reserve Board's Open Market Committee approved a policy "to promote the degree of ease in bank reserves and money market conditions essential to greater growth in monetary aggregates in the months ahead" at its Jan. 11 meeting. Reports of the meetings are traditionally released three months late. The Fed said that considerable concern was expressed at the meeting about the "persistent sluggishness" of key monetary aggregates. In light of this, the Fed decided its policies should be guided more by the course of total reserves than had been customary in the past.

The Supreme Court was again asked to order divestiture by El Paso Gas. the fourth time in eight years, the Justice Department has urged the high court to order El Paso Natural Gas Co. to sell its Pacific Northwest Pipeline Corp. unit. Eight years ago the Supreme Court ordered the divestiture on grounds that the acquisition of the pipeline firm violated the Clayton Antitrust Act, but El Paso has won three delays in executing the order.

El Paso is again seeking a delay and the Justice Department is opposing the move. A bill is currently in Congress that would allow El Paso to keep Pacific Northwest Pipeline. Three insurgent candidates won posts on the American Stock Exchange. In an election that reportedly pitted floor traders against brokers, the floor men won three posts. James J.

Maguire, floor specialist for Dyer, Maguire, Dritz became the first insurgent ever elected Amex vice chairman. Outgoing vice chairman, Robert C. Van Tuyl, was elect WEEKS ENDING YESTERDAY A NEW YORK-Tha Dow Jones 30 Industrial ttock overage closed at 958.08, off 4.52. High during the day was 970.57; the low, 953.42. The Amex closed up 0.02.

LONDON The Financial Times index of 30 industrial stocks closed at 519.9, off 3-0 from the 1972 high of 522.9 set April 7. The 1972 low of 470.4 was set Jan. 10. 8 Part III 70 -p 60 1 5 f-ff f-1- 20 1 10 1 800 26 Bipiivm 1 IN MIUK MS ed chairman. Another floor trader, Robert D.

Hawkey of E. F. Hutton was elected a governor, and floor broker William F. Bohner was elected to the exchange's new nominating committee. Eight of nine members of the "management" slate won election the only loser was Frank L.

Thompson of Paine, Webber, Jackson Curtis. The World A group of Japanese banks bought 90,000 shares of Citibank stock. Daiwa Securities America, a subsidiary of Daiwa Securities Co. one of Japan's largest brokerage firms, said the banks paid about $5 million for the stock of First National City parent of Citibank. Daiwa said it was the largest block of U.S.

securities ever purchased by Japanese institutions. First National City has about 54 million shares outstanding. Volkswagen said it plans to reduce its 1971 dividend by more than 50 Volkswagenwerk A.G. announced in Wolfsburg, West Germany, it plans a dividend of 4.50 marks ($1.42) per nominal 50-mark share for 1971 compared with 9.25 marks in 1970 The proposal will be decided upon at the annual meeting July 7, VW spokesman said. The giant auto maker suffered sharply reduced profits last year.

Common Market central banks will limit their currency range to 2.25 A communique from the Bank for International Settlements in Basel said the practice would begin April 24. The agreement provides that central banks will maintain the 2.25 currency fluctuation limit mostly by intervening in the exchange market in each other's cur-. rencies. However, if one or more of the Common Market currencies reaches its outer permitted limit against the dollar, the intervention will be in dollars. The bank said central banks of Denmark, Ireland, Norway and Great Britain as future Common Market members hoped to participate as soon as possible.

A North American Rockwell unit seid it will float a new Eurobond issue. The $40 million obligations to be sold by North American Rockwell Overseas Corp. will include $25 million of guaranteed sinking fund de--- bentures and $15 million of guaranteed notes. The debentures are scheduled to fall due in 15 years, and the notes will have a maturity of 7 years. Underwriters said that on the basis of current market conditions, a coupon of 8V4 is indicated for the debentures and a coupon of 7 is indicated for the notes.

The exact terms of the financing will be fixed April 25 through an international underwriting group led by Kuhn, Loeb Co. International. At the Top A new chairman was named for the National Alliance of Businessmen. President Nixon appointed Gordon M. Metcalf, chief executive officer of Sears, Roebuck to head the organization which promotes job opportunities for the disadvantaged.

Metcalf succeeds John D. Harper, chairman of Aluminum Co. of America, who held the post for the past year. NAB operates a program in conjunction with the Labor Department whereby business provides jobs and training and the Labor Department provides the funds. Briefly Told DuFont Co.

said it expects to earn $2 per share in the first quarter compared with $1.51 a year earlier Cutler-Hammer Inc. predicts per share earnings in the first quarter will be 70 to 80 higher than the 38 cents earned a year before Reichhold Chemicals Inc. expects 1972 profits to top $1 per share compared with 54 cents last year General Cinema Corp. predicts earnings will set a record this year. The firm earned $1.62 a share last year.

A spokesman for Metro-Goldwyn-Mayer Inc. said the company has no knowledge of reported plans to sell MGM's record division for cash Merger and reorganization agreements have been signed under which J. J. Newberry Co. will become a wholly owned subsidiary of McCrory Corp International Airlines has changed its name to Communications Cybernetics Corp.

because it has gone out of the airline business and diversified United Brands said it plans to offer the public 17 of the stock of its wholly owned subsidiary, Baskin-Robbins Standard Poor's Corp. raised the long-term senior debt rating on CIT Financial Corp. to double-A from single-A because of CIT's conservative debt ratios Associated Brewing Co. agreed to sell three breweries to G. Heileman Brewing Co.

for about $16 million. BY ROBERT E. WOOD Tlm Staff Wrlttr The Department of Housing Urban Development office in Los Angeles Monday declared a moratorium of two to four weeks in its processing of loan insurance applications for planned new residential buildings. HUD blamed the need for the moratorium on an "overpowering" backlog of applications for government-insured loans for new construction and a shortage of trained personnel. The processing freeze affects construction firms planning new homea and apartment buildings from San Luis Obispo to San Diego.

It comes as the result of sharp cutbacks in staff levels at the HUD office here and processing delays that reportedly have ranged from six to 12 months on some loan applications. Need Time to Catch Up Raymond Carrasco, director of the office here, said in his announcement that officials will use the moratorium period to catch up with the backlog of applications and to "permit intensive staff retraining in quality processing procedures." He said applications for Federal Housing Administration -backed loans on apartment projects will be delayed for four weeks and that proposals for FHA loans on new single-family house tracts will be held up for two weeks. Loan applications on existing, or "used," single-family homes won't be affected, Carrasco said. Neither will special programs such as Operations Breakthrough (new-technology factory housing), public and college housing and hospital work. Also unaffected are VA home loans.

Spokesman Leo McDowell of the Los Angeles office explained that the staff here has been cut to about 350 from approximately 400 a year ago because of federal cost-cutting programs. "We want to screen the applications thoroughly and process them for quality," he said. "And with people being transferred around among the various regional and area offices, we must retrain our personnel for greater emphasis on quality." The HUD office's backlog of work reportedly reached such an extent six months ago that "it was taking about a year to get things through," according to one mortgage banking executive. "Even now, it takes about six months to get an OK out of anyone downtown (on a proposed new construction project)." The mortgage banker complained that some firms seemed able to get their applications processed faster than others. But McDowell of the HUD office turned aside the complaint of favoritism.

"We process these applications in the normal order," he said. "There is no expediting of one request in front of another. e' applications go through in the order in which they're received." nancial was composed largely of the remains of the late Bart Lytton's financial empire. A year ago the tax loss carryforward was $1.2 million but was largely offset by $1 million of earthquake loan losses. Great Western's results have been enhanced by another factor growing out of the LFC merger, an interest rate subsidy on LFC's borrowings from the Federal Home Loan Bank system.

That subsidy, to which regulators agreed when the merger was arranged, saves Great Western about $1 million every three months on the carrying costs of the LFC debt. Davis said gross income in the first three months of the new year totaled $69 million, up from $60.9 million a year earlier. The growth reflected both a higher lending volume and better interest yields on the complex's total portfolio of new and old loans. Lending volume reached $180.6 million in the quarter, up 86 from a year earlier. Savings, meanwhile, increased by $176 i 1 1 i in the quarter, up from the previous record of $140 million set in the first quarter of last year.

Surpassed Only by Home As of March 31, Great Western had assets of $3.9 billion and total savings of $3.1 billion. That was up from $3.56 billion assets and savings of $2.6 billion at the end of the 1971 first quarter. Great Western's operation is surpassed in size only by Home Savings Loan the nation's largest. Home is privately controlled by interests associated with its founder, the late Howard F. Ahman-son, and is tentatively planning to offer stock to the public this year.

For Financial Federation, the Los Angeles-based holding company which struggled with Please Turn to Page 11, CoL 4 GETZE Writer At the Institute of Investment Banking in Philadelphia last month, Kendall told about 300 securities in-" dustry officials that the business "had four lessons to learn" from the turmoil of 1969-1970. Later, in shirt sleeves, and over a paper-strewn desk at SIA offices in New York, Kendall outlined those lessons again for a reporter. (The setting1 was ironic, for the SIA offices were formerly the headquarters of McDonnell a casualty of the troubled times about which Kendall spoke.) "The first lesson industry management must learn, is that it is part of a very cyclical and volatile business perhaps the most of any industry," says Kendall. Over the last century, SIA's president says, stock trading volume (the industry's main source of income) has increased as much as 36 in two years, and fallen as much a3 26 in one year. "Using these statistics, the securities business is more volatile than autos, steel and housing combined," he says.

Things that go up must come down. "The second lesson is that super growth is fool's gold. An industry that gets caught in an abnormally high growth period has a tough time coming down to a period of low or no growth." Kendall pointed to the California savings and loan industry, bowling and color TV as examples. No Short Cut His third point is that there is no short cut to efficiency. When volume got troublesome, some companies thought they could run out and buy a computer to solve the problem.

That doesn't work. It takes plain hard work to upgrade your operations." Kendall says lastly, that the securities industry found out bad times can quickly draw attention. "The business operates in a goldfish bowl. We're a highly visible industry to Congress, the public and the media. It's because we're the middlemen in the free enterprise system we raise capital for industry.

We have to remember our responsibility," he says. Those reasons were in part responsible for the creation of the SIA, says Kendall. "We felt the industry had to speak with one voice one strong voice." The new organization represents over 850 securities firms of all types in all parts of the country. "It is potentially more powerful and effective than its predecessors," he says. Kendall himself is the former president of the Assn.

of Stock Exchange Firms. Before that, he was an economist with the Federal Reserve Bank of Atlanta, the U.S. Savings Loan League and the Please Turn to Page 11, Col. 5 Great Western and Financial Federation Post Profit Gains BY JOHN Times Staff NEW YORK Has the securities industry learned its lesson? "Definitely yes," says Leon T. Kendall, president of the Securities Industry a trade group formed late last year by the merger of the Investment Bankers Assn.

and the Assn. of Stock Exchange Firms. "The industry's troubles of 1969-1970 left us indelibly impressed. We're stronger, yet flexible. Wall Street doesn't make the same mistakes twice," says SIA's chief operating officer.

The securities business got weighed down in 1969 by a dramatic Increase in volume on the major exchanges. Backshop paperwork piled up and "fails," or uncompleted orders, rose substantially. Trading hours were cut but the problem per-, sisted. Then in 1970, the stock market plummeted, sharply reducing investment firms' assets and their profitability. A heavy toll was taken.

In 1968, the New York Stock Exchange had 646 firms with 4,278 offices and about 165,000 employes. By the end of 1970, there were only 572 NYSE member firms with 3,636 offices and 149,000 employes. In all, about 100 securities firms were liquidated or merged into other companies. May Co. Reports Profit Gain, Sales Record for Year BY JOHN A.

JONES Timet Staff Writer May Department Stores Co. of St. Louis, which operates May Co. of California and other chains coast-to-coast, Monday reported increased earnings and record sales for the year ended Jan. 29.

i Earnings were $41,981,000, or $2.75 per share, on sales of $1,310,798,000, compared with fiscal 1970 earnings of $31,873,000 or $2.08 per share on sales of $1,174,834,000. Stanley J. Goodman, chairman, said the company expects sales and earnings to continue rising in 1972. The sales increase of 11.6 over 1970 was the largest one-year volume gain in May's history. Sales of stores which were open in both years had a record increase of 5.7 in 1971 over 1970.

Venture Stores May Department Stores for the first time released separate sales figures for its Venture discount stores, which grossed $89,173,000 in 1971, vs. $35,435,000 in 1970. Both totals included leased food department sales, which amounted to $26,336,000 in 1971 and $11,090,000 in 1970. Corporate sales totals for 1970 were restated to include leased food sales not previously included in May's published sales, the company said. Goodman commented that "1971 was not an easy year for getting business" because the consumer, though "in a somewhat better frame of mind than in 1970, was still kept from full buying confidence by such concerns as unemployment, inflation and fears of the downtown environment." He said expansion of the Venture discount stores continued on schedule in 1971 with the opening of five mors stores, while the five Venture stores opened in 1970 had substantial second-year sales increases.

Anticipated startup costs of the Venture stores resulted in a decrease of earnings, before interest, of 6 cents per share in 1971, vs. 10 cents in 1970. May Department Stores operates 98 department and discount stores nationwide. Two of Southern California's largest savings and loan holding companies, Great Western Financial Corp. and Financial Federation Monday reported strong gains in 'revenues and net income for the three months that ended March 31.

Beverly Hills-based Great Western, the nation's largest publicly held firm, recorded net profit of $8.2 million or 55 cents per share. That was up from $6.3 million or 42 cents in the first quarter of 1971. Great Western Chairman Stuart Davis noted that $253,000 of the latest quarter's profit was extraordinary income from federal, tax bene-, fits. This was a carryforward to compensate for prior losses of LFC Financial before its late 1970 merger into Great Western. LFC Fi- Hyatt, based in Burlingame, operates hotels and lodges across the United States with total capacity of 12,000 rooms.

Sales during the fiscal year ended Jan. 31 were $147.5 million, with net income $4.1 million. Recrion Los Angeles, operates two Las Vegas hotel-casinos, the Stardust and the Fremont. The firm had $61.6 million in sales last year from continuing operations, and a net loss of $1.7 million for the year. Recrion (formerly Parvin-Pohr-mann Corp.) suffered an extraordinary loss of $3.9 million last year from the sale of the Aladdin Hotel in Las Vegas, which it had purchased five years ago.

The company also had a deficit of $2.2 million from the sale of its headquarters building on North Robertson Blvd. here. Hyatt Offering $73.3 Million in Stock to Acquire Recrion The Hyatt Corp. hotel chain said Monday it is negotiating for the purchase of Recrion Corp. The price would be $73.3 million in Hyatt Corp.

stock. Hyatt would issue two shares of its common stock for each of the outstanding shares of Recrion common stock. The two shares of Hyatt stock must be worth at least $55 when the merger is closed or Recrion can scrap the deal, Hyatt said. If Recrion terminates the agreement, Hyatt will have the option of issuing more of its shares so the final package will equal $55 for each share of Recrion stock. Directors of both companies will meet soon to discuss the proposed acquisition.

Recrion officials could not be. reached for comment..