Show MONEY MARKETS MARI ETS By James McMullin Th Th Telegrams Telegram's Exclusive Observer Along Wall Wail Street NEW YORK The maritime commission will soon take a a. bold step toward outright public ownership ownership ownership own own- and operation of ot the American American American Amer Amer- ican merchant marine Arrangements Arrangements Arrangements Arrange Arrange- ments are virtually completed whereby it will acquire all the common stocks of ot the Dollar Line and set up a a. new government corporation to be known as tb th Dollar Company of ot Delaware It has authority to do this under the amendment to the maritime act passed by the last session of congress The commission has elaborate plans t to revive the Dollar Line now practically out of business under Uncle Sams Sam's management Approximately will be spent in building seven new ships in the next four or fl five e years The present Dollar Line vessels will be reconditioned an expensive expensive expensive sive job Weekly the around world sailings will be resumed The existing Dollar organization will be retained as far as possible ex except pt for the upper upper executives to to operate the ships but will take its orders henceforth direct from Washington To minimize criticism the maritime maritime mari marl time commission will take the position that its ownership of the Dollar Line is temporary temporary-a a sort of ot trusteeship It will probably be announced that the property is La to be restored to the Dollar Lines Line's security holders once the government has hM put it back on its feet financially in in line with the commissions commission's theoretical objective of fostering a privately-owned privately merchant marine Shipping insiders get a laugh out of that They remark that It will be one of the most amazing miracles on record if the line ever runs in the black especially black especially after the commission sinks an additional additional addi addi- investment of or more in it The government might as well promise to abolish taxes as soon as the federal debt is ls entirely paid off The offer would be just as safe safe and and mean just as little The commission will own the Dollar Line for keeps In 1933 a law was enacted the enacted the famous section 77 to 77 to establish a anew new ew set of ot rules for the financial reorganization of If bankrupt rail rail- roads The total number of re reorganizations reorganizations reorganizations re- re organizations consummated under this law to date is exactly zero Section 77 iT provides that the assent of two-thirds two of every class of se security holders is required to put a reorganization plan into effect This was supposed to make it impossible for small groups of bond or stock holders to block a reorganization by holdup tactics Actually it prevents any action because the senior bondholders can never agree with the junior stockholders as to what constitutes constitutes constitutes an equitable readjustment of capital The law also stipulates stipulates lates that the debtors i. i e. e the common stockholders must submit submit submit sub sub- mit the initial plan for Naturally their ideas never meet the approval of those who own senior securities Tins This is why despite all an the talk about the urgent need for reorganizations reorganizations reorganizations nothing ever happens Financial leaders comment that if President Roosevelt and Senator Wheeler and the interstate commerce commerce com corn merce commission really want to expedite the revamping of obsolete and watered financial structures structures tures they will have to revise this law Jaw first Retail dem demand for r autos has risen so fast in the past month that the available supply of 1938 models is running short in several lines ines Most manufacturers shut shutdown shutdown d down ow n sharply on production months ago when it looked as if nobody was ever going to buy another another another an an- other automobile Consequently there were comparatively few new cars in stock when the customers began flocking in This development development develop develop- ment was a complete surprise to the industry Auto factories are now retooling in preparation for the production t u ut 1939 models so they can hardly hardly hardly hard hard- ly resume the intensive manufacture manufacture ture of this years year's cars Some of the demand has therefore been diverted into high grade used cars making a big and beneficial dent dentin dentin dentin in earlier Inventories One result of the upturn will be a a. substantial increase In production production production I tion schedules for 1939 models which in turn means larger orders for steel copper copper rubber glass paint and other materials The current flurry of activity by Glenn Franks Frank's Republican program program program pro pro- gram committee was instigated by strong sub rosa pressure pressur from tom 1 President ex-President Herbert Hoover r and his supporters Mr Hoover honest honestly ly Jy believes that his party ought to have a program The most in influential influential in- in members of ot Mr Franks Frank's group do not agree but agree but they dont don't dare snub him too openly Hence it was decided to hold i a hearings and coordinate ate the views of various elements within the party Its It's a safe bet that the program committee will publish no report before fore the November elections That suits G. G O. O P. P congressmen running for reelection just fine a aThe The boys much prefer to make hi their own issues to fit their particular particular par par- Ce localities No politician iCa wants to have to defend party E policies his constituents might not like The only plank on which all Republicans will agree is We WC V favor the eviction of Franklin FrankIln D. D 3 c Roosevelt from the White Howe House s. s c 5 Copyright 1938 for The Telegram j |