The Boston Globe from Boston, Massachusetts • 28

FINANCIAL K'i-sWv The Market iiiiiiiiiiiiiiiiiiiiiniiiiiiMiiiiiiiiiiiiiiiii Guest of Honor Doesn't Show For Steel-Peace Celebration By PHILIP GREER NEW YORK The stock market tried to celebrate the new steel contract Tuesdav, but the guest of honor didn't show up. The market opened on a firm note, but selling in the steels quieted things down and held most averages to small gains. 1 1 Polaroid Ready To Expand Again NX NN wsc DR. EDWIN H. LAND his company expands again 9 $9 4000 Jobs Page Twenty-Eight WEDNESDAY.

SEPT. 8, 1963 Interest and LB Johnsonizing The Market By J. A. LIVINGSTON Here's a strange, hard-to-analyze paradox: The price of money goes up and at the same times stays down. Commercial banks are running short of their basic raw material money to lend.

They reach for it by paying 42 percent to depositors. Yet, they can still borrow money for 4 percent from the Federal Reserve System. This is an oddity which isn't an oddity. It's poli-: tics. The money market has been Johnsonized.

Wall Street is out of phase with Washington or vice versa. The schizoid state of the money market was dramatized last week by the First Pennsylvania Banking and Trust Co. The bank surprised the Philadelphia banking community by raising its interest rate on regular saings deposits from 3X2 percent to 4 percent and offering 4X2 percent renewable five-year certificates of deposit (savings bonds) cashable in 90 To meet the competition, savings banks prompt-. ly advanced their rates to 4U percent. These First Pennsy rates are neither new nor outstanding.

Four percent on time deposits has been available on the West Coast, in New York and in cities in the Southwest and Midwest. A .42 percent rate on five-year certificates of deposit has -been available in Atlanta, New York and the South-vvest. But Philadelphia normally has been an island of low-interest. Funds have moved away to higher-interest areas, notably the West Coast. First Pennsy decided to fight the trend by paying more money.

New York City banks also are in the scramble. They're issuing 4Vs percent non-negotiable promissory notes to corporations. Thus, they borrow from customers who have more money than they need in order to lend to customers who need more money than they have. As the result of this upward pricing of money, rose Hi to 14174. Litton' Industries hit 109 but closed at 108, up 278.

Several of the electronics issues were responding to recommendations by advisory services and brokerage firms. Among the volatile trading stocks, Xerox traded a block of 10,900 shares at 171 V2 and went on from there to close up ZVz at 173 another new high. Polaroid gained to 84 and just missed breaking into new high ground. Comsat came alive with a move of 274 points to 52 in fairly active trading. U.S.

Smelting lost 2 to 98, al though the company's preferred stocks set a new high. American Airlines reported new records in passenger and freight traffic in August, and Eastern Air Lines claimed a 25 percent increase in passenger traffic in the same month, but the reports didn't do much for the group. American gained 7i to 55 5s and Delta gained 74 to 97 after setting a new high at 97 Vz, TWA was down 74 and National and Pan American lost 7 i apiece. Continental Air Lines made the best showing, up 3s to 35. There were some good gains in the blue chips, which pushed the averages up in spite of the weakness iri the steels.

Alcoarose 1, DuPont was up l3i, Johns-Mariville added 17s and Union Carbide jumped 13,4. General Electric and Westinghouse both set new highs early but fell back to close with losses. G.E. was down 7i to 10774 and Westinghouse lose to 5574. (Boston Herald Tribune) best August in history, with all of the "big three" making the active list.

Chrysler, in fifth place, rose Ts to 50V4, General Motors added IV2 to 101 Yh and Ford climbed sa to 5414. Sperry Rand led the active list, trading 175,300 shares on the way to a i-point gain to Chartists said the stock had bottomed out at around 12 and was being helped by the strength in lower-priced electronics stocks. The. were also rumors of institutional buying in Sperry, but the only large block of the stock to cross the tape was 10,000 shares at 137g. Electronics stocks dominated the active list.

Including Sperry Rand, eight of the 15 busiest issues were in the electronics industry and 15 electronics issues set new highs. Ampex was second most active on a new system for transferring computer data from paper tape to magnetic tape, reportedly at half the prica of computing systems. The stock rose to Technical Materiel rose to 12, up to a point, Raytheon added l'i to close at 317,8, a new high, Burndy was up Y2 and Furroughs climbed Ts. Hewlett-Packard, Standard Kollsman and Victor Comptometer all hit new highs but fell back to close lower on the day. The big electronics showed even better.

Fairchild Camera, Beckman and Texas Instruments all closed at new highs. Fairchild gained 3 Vi to 81, Becman was up 1 to 91 and Texas Instruments The Herald Tribune 100-stock composite gained 0.25 points on the day, its gain cut in half by the six steel stocks in the average. The Dow Jones industrial average, which includes two steel issues, started the day strongly, but settled for a gain of 2.14 points. Analysts pointed out that the settlement would cut deeply into the steel industry's profit margins unless producers can manage some kind of price increases. Inventories built up by users as a strike hedge must now be pruned to normal levels, indicating a cutback in production rates.

But mostly, many observers agreed, it was a case of selling on the news, one of Wall Street's favorite games. Losses in steel issues ranged up to 35g points for Lukens and for Jones Laughlin. U.S. Steel lost 1, Youngs-town dropped a point, Bethlehem was down and National dropped Vs. Alleghany Ludlum edged to a new high early in the day but closed down Va at 45 3i.

The rest of the market put on a respectable show, although volume dropped to 5.75 million from Friday's 6.01 million shares. There were 76 new highs, including a good mixture of blue-chip, growth and speculative stocks, while 14 issues set new lows, seven of them preferred stocks. The breadth index narrowed, with 659 stocks up on the day, against 745 in the previous session, sd 481 losers, up from 363 on Friday. Automobile manufacturers rode the crest of the second Waltham where the company has 75 acres and employs about 1700. The new complex, which would augment the Waltham facility, would be built up gradually over a 10-year period according to Joseph W.

Gibson, manager of Polaroid's real estate division. Forbes Estate is off Route 1A in Norwood and the package that Polaroid seeks includes 30 acres In Westwood. Current plans, however, call for all building to be in Norwood. At present the property is zoned for residential use. If the change is okayed, the town will be a big financial winner for at current tax and assessment rates a $1 million building yields $36,000 in tax revenue.

Polaroid, founded by Dr. Edwin Land in 1937, is undergoing a period of rapid expansion both in the U.S. and overseas. At the annual meeting of stockholders in April Dr. Land spoke of a new film plant in Holland to supply the Common Market and another in Scotland to serve Commonwealth countries, both this year.

New overseas sales organizations are also being added. By DONALD WHITE Science-Industry Reporter Polaroid is planning a nine-building, S9 million film-manufacturing complex in Norwood which may eventually boost the company's work force by 4000. Forbes Estate, a 204-acre tract on the Norwood-Westwood line, is the site for the proposed expansion, which hinges upon town approval of zoning changes at a Sept. 23 meeting. Polaroid has an option on the land and is in a hurry to begin building.

Company-officials want construction on the first building to begin by November and be completed by July. "Why the haste? Because Polaroid's existing film-making plants are finding it hard to keep up with demand. In fiscal '64, film sales outstripped camera revenue for the first time. Of last year's sales of $138 million, more than half was from film. Much of Polaroid's film is produced at Financial Notes Sears' Sales, Net Set Records CHICAGO Sears.

Roebuck negotiated a $16.75 million un- These small loans are carried and Co. reported record net secured term loan at a 52 on Atlantic's books at $34.8 sales and income for the six percent interest rate with the million. $50,000 Baby Their Biggest Business Event United California Bank. International Telephone rr 1 t- i For a small (20 employees. Mac rw it leiegrapn vurp.

announced the assets of Gibbs Automatic completion of the acquisition $200,000 annual volume) busi-Mnuldinir Corn 'Hpnriprcinn ot all outstanding shares of ness, $50,000 is a lot to shell Press Wireless Inc. out for a new piece of equip for cash substantially in ment. excess of $1 million. Eastern Air Lines flew of Mo, vij months ended July 31. The company's mid-year report, now being mailed to shareholders, shows: Net sales increased 10.3 percent to $2,851,808,961 compared with $2,586,366,089 in the first half of fiscal 1964.

Net income rose to or 76 cents per share. This surpassed by S1.5 million 1964's first half record $114,071,188, or 75 cents per share adjusted for the two-for-one stock split of last February. Combined net in 209,000 revenue passenger Spinnin2 Ca In Madison General Aniline Corp. over the Labor 11311 OU. rav miles in August, an increase of Film Maiden, partner-bosses wppkpnn rnmn ptpri tha rnn.

solidation of its rnannfartnr- company reported. ing, sales and distribution operations at Arlington, Texas. secki Aircraft Corp. said it had a net loss the year Beckman Instruments an- ended June 30 of $301,311, including development expenses vPuw come which includes sears i equity in the undistributed of $287,040. In the previous fis- net income of unconsolidated msiiumen cal yea net loss was tgssQO a j.onaon, England manuiac- after development expenses of turer of analytical medical mi subsidiaries and Simpsons-Sears, its Canadian affiliate, the Federal Reserve System's 4 percent price for "wholesale money" seems out of line with what is happening in the real marektplace, where lenders, borrowers and depositors meet.

And, oddly, banks eren't grabbing this 4 percent money as a bargain. This double paradox is explained by the John-sonization of the money market. In November, crisis engulfed the British pound. The Bank of England raised its discount rate from 5 percent to 7 percent. tThe Federal Reserve thereupon raised its rate to protect the dollar from 32 percent to 4 percent.

jThis was a normal reaction. The "money market" Wall Street tried to follow. The Citizens Southern National Bank of Atlanta and the First National Bank of Boston decided take the lead. If the Federal Reserve's price for money" went up one-half point, surely ithey could boost the "basic retail price" the prime Irate to their customers from AVz percent to 434 percent. This is the rate charged the best risks, the large corporations.

President Johnson remonstrated: It might "slow 'down our economic advance." The rise was rescinded. The rate stayed at percent. Yet it, too, is a fiction. Bankers have boosted the price of money to borrowers without raising the prime rate: They grant the prime rate to fewer borrowers; they ask borrowers to keep larger deposits on hand; they are more selective in their lending, thus reducing their risks while maintaining their price. Thus, the two key money market rates aren't what they seem.

When banks 'bid 4 percent and 4Vi percent for deposits, you can be sure they're not making many loans (as a percentage of the total) at the 4 percent prime rate. Nor are banks responsive to the 4 percent discount rate. They have been buying reserves from one another at 4U percent, and in a pinch, 4V4 percent, hese are "Federal funds." deposits which commercial banks keep with the Reserve Banks. "I Why this willingness to pay more for reserves? Because banks don't want to be indebted beholden to the Reserve Svstem. amounted to 93 cents per uis.uuuieiiu, share compared with 92 cents an exchange of stock.

Boeing Co. awarded a con- a year ago tract Ior about $12 million to Leaseway Transportation Rohr Corp. in connection with Hilton Hotels Corp. sold the Corp- said it has joined with Boeing's model 737 short-Statler Hilton Hotel in Cleve- Banc Nacional De Mexico SA range commercial transport land for over $3 million to two in forming a new company to program. New York investment bankers offer diversified leasing serv- acting as individuals but will ices to Mexican industry.

Business Outlays for new continue to manage it. plants and equipment have Columbia Records Distrihu- been scaled a i A Denison Mines Ltd. said it tion Corp. said it acquired has signed an agreement to Electro Music Pasadena, ernment SUIvey shows that deliver 15 million pounds of maker of Leslie speaker 1965 expenditures currently uranium oxide to the Canadian systems for electronic organs. al'e budgeted at a record government over the next five up 13.4 percent years.

The Banks for Coooeratives horn 1964. This compares with announced a public ofTerin? of a 12.3 percent increase pro-Shareholders of Food Fair S211 million debentures about Jected in May and an 11.8 per-Stores Inc. approved merger Sept. 10. The securities dated cent advance planned in Feb-of the supermarket chain's 81 Ort.

4 and due Anril 4, 1966, ruary. percent owned Fox Markets will be marketed through Mohawk Airlines flew 32 Inc. subsidiary into Food Fair John T. Knox, the banks' fiscal million revenue passenger at a special meeting. The trans- agent, and a nationwide group in August, an increase of action is worth about S2.5 mil- of securities dealers.

ly-9 percent over a year pre- lion in Feed Fair stock. vious. The carrier said its load Missouri Pacific Railroad factor or percentage of seats White Consolidated Indus- will order 2050 new freight occupied rose to 53.8 percent tries Inc. said it has acquired cars and 50 new locomotives from 52 9 percent a year ago. Bob Towne and Alex Bigney are clucking over their new hydroforming machine like a couple of mother hens.

It's the biggest business event in their lives since setting up shop in 1956. "We'd be satisfied if it increases our business 20 percent," says Bigney who wears the treasurer's hat. "But we are hoping for more." They walk around the gleaming gray equipment, patting it as they go. They cannot hide their pride. "It's the only machine of its kind on the East Coast North of New Jersey," President Towne said.

Basically, its function is to turn flat metal discs into cones or hemispheres. It can transform any metal up to eight inches in diameter at one hydraulic grunt. It can turn out as many finished pieces in two hours as a metal spinner can in two days. "We hope to pass on some of the benefits to customers in lower prices," Towne said. "And mention that we can tool up for most jobs in a week a week's lead time is all we need.

People in the trade will be interested in that," Bigney added. Most of the company's customers are in the Greater Boston area. It is subcontracting for a Quincy company that is producing bomb cases. "For Viet Nam," said Towne. He walked us around the shop and at one spinning machine Towne's son was busy forming the nose cone for a the forged steel gats valve snH dan to rebuild another The 4 percent rate might seem like an invitation product line of Worcester Valve i820 frieght cars at a total cost 'f Tha TToHorl Rocon-a Qctom Worcester, for an undis- nf more than S44.745.000.

Bond Offering oiiiuuui ui UOWnmg D. jenK5, prebiuem num. unciiuj ui Data Products Corp. said it announced Po-tsmouth, Rhode Island, FIVE MINUTE'S WORK Alex W. Bigney (left) and Robert K.

Towne of New England Metal Spinning Co. Maiden, show off compass housings turned out by new hydroforming machine at rear in five minute period. (Joe Dennehy Photo) received a $1.5 million order Water Fire District General does not have a come-and-get-it easy-money policy. Banks are expected to get out of debt periodically. This emphasizes the fictional character of the money market.

What Mr. Johnson wants, Mr. Johnson gets if only in appearance! The money market is tight. Funds are scarce. But key interest rates make it look easy.

from the Univac Defense om International Inc. pur- Obligation Water Bonds was Systems division of Sperry chased the building and prop- made Tuesday by an under-Rand Corp. for more than 100 ertv formerly occupied by writing group jointly managed high-speed printers for use Labor Discount Center Inc. in by Harkness Hill Incorpor-with computer systems. suburban St.

Louis for ap- ated and G. H. Walker Co. Santa Fe Drilling Co. said it proximately SI.

6 million the The bonds, which are priced to firm announced. yield firm 2.75 to 3.80 are are interested in you Man or Woman If you want a new career dated May 1, 1965. and due Executive Corner Transcontinental Gas Pipe from May 1, 1967-May 1, 1996. bomb casing. "I'm making llllllllllllllllllllllllllllllllllllllllllll Line S50 million of The bonds will be interest him work the Summer," new 47s percent bonds due exempt in the opinion of Towne said.

"Metal spinners miiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii 1986 are quoted at 98J8 bid, counsel from all present Fed- are like glass blowers in demand. It's a good trade for him to be in." 98i asked, down from the erai income taxes. Howard Johnson Please send me Security Planners Associates Inc. Attn. Mr.

L. Dexter Faunce, President 33 Broad Street, Boston, Mass. 02109, 423-3311 I am interested in a full-time career. part-time career. Name Address Tel Present Position original offering price of $99.04.

Laurentide Financial Corp. Ltd. is willing to pay $27.2 million for the small loan paper of Atlantic Acceptance Corp. Ltd. according to Montreal Trust, receiver and manager of insolvent Atlantic.

PROSPECTUS and CURRENT REPORT The elections of Richard D. Muzzy and Russell C. Alm-quist as vice presidents of the Howard D. Johnson Co. was announced by Howard B.

Johnson, president. Muzzy, a former vice president of the New England Confectionery Co. and a former president and treasurer of the Daggett Chocolate joined Howard Johnson's in September, 1963. Almquist joined the company in 1945 and for the past two years has held the posi HOWARD Jaws! UNUSUAL Supervisory Opportunity CECIL L. SCHULTZ RICHARD B.

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