Business & Finance: Downtown

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¶Having set another Recovery high in its prolonged rise, the stockmarket hesitated, grew jittery, suddenly wiped out all its gains for the past month in a deep two-day plunge—worst break in more than a year. Bond prices also dipped sharply. Apparently touched off by the belated realization that a European war might not be an unmixed blessing for U. S. business, the break had a more fundamental cause: ' the unwelcome thought that stock prices might be outrunning business gains, broad though the latter have been.

¶In the face of recurring salvos of dividend raises or resumptions, Pullman, Inc. halved its $3 annual rate, which had been maintained since 1931. A general builder of rolling stock as well as a common carrier, Pullman saw little immediate hope of fatter profits. Two other reasons for the cut: 1) "Current uncertainty with respect to increased taxation under the Railroad Retirement Act, the Social Security Act and other Federal legislation." 2) Possible need of capital for new sleeping cars. Pullman has not commissioned a new Pullman since 1930.

¶Last week all the important officials in U. S. Steel Corp. journeyed from Manhattan to Pittsburgh to introduce Benjamin Franklin Fairless to his future fellow-citizens at a monster luncheon. The head of a Steel Corp. subsidiary is a personage in any community, and Steelman Fairless will command the biggest subsidiary of all—the Carnegie-Illinois merger (TIME, Sept. 9). His sponsors included Chairman Myron Taylor. President Adolf Irvin, Vice Chairman Edward Riley Stettinius of Steel's finance committee. Director Junius Spencer Morgan. Among their luncheon guests were Pennsylvania's Senators Guffey and Davis. Carnegie Institute's Samuel Harden Church, National Steel's Ernest Tener Weir, Andrew William Mellon and his nephew Richard Mellon.

Invoking the names of local steel heroes like Carnegie, Phipps and Frick, Chairman Taylor enumerated the benefits likely to flow from his policy of merging subsidiaries, explained that the chief purpose of the luncheon was "to make your better acquaintance and to enlist your sympathetic understanding of our plans for expansion in the Pittsburgh and Chicago districts. . . ." His plans called for a total expenditure of $140,000,000 on all U. S. Steel's plants & properties.

Mr. Fairless was introduced as "new blood" brought into the corporation "without reflecting on anyone's ability." Until a few days before he had been Tom Girdler's crack assistant in Republic Steel. Now 45, he is primarily an operating man with a profound knowledge of steel alloys, though in the Carnegie-Illinois combination he will direct sales as well as manufacturing. Since he will rule a dual kingdom. Mr. Fairless was whisked off to Chicago for another luncheon next day. There Steel's bigwigs presented him to such Chicagoans as Sewell Lee Avery, Charles Gates Dawes, Mayor Edward Joseph Kelley. President Irvin announced the retirement of Illinois Steel's President George Gowen Thorp, the promotion of Vice President George Cook Kimball.

¶Upped for the second time within a month was the price of domestic copper, restoring the old code level of gc per Ib. Copper dropped 1¢ after the death of the Blue Eagle. Meantime export prices, strengthened by mounting orders from European munition plants, reached 8¾¢ per lb., highest figure in two years.

¶Singer Manufacturing Co.'s annual meeting is not held until September because it takes nine months to assemble the sewing machine company's world wide figures for the previous calendar year. Lest tax-hungry foreign governments find out how prosperous Singer really is, statements are released with great reticence, are usually qualified by dark forebodings on the part of Singer's chairman, Sir Douglas Alexander. This year dour Sir Douglas dwelt on the restrictions that European governments have placed on imports, said that difficulties in the transfer of currencies had increased, regretted that Singer has received no remittance from Germany for the past 18 months. But Singer profits last year were $13,833,917 — up 28% from 1933.

¶Though fertilized profits were generally up in the last fiscal year, thanks largely to the industry's code, International Agricultural Corp. reported a 32% drop. Reported reason: International's President John J. Watson headed the Fertilizer Code Authority, insisted that his company observe the code to the letter. The rest of the industry chiseled.

¶Making its initial appearance in new-issue advertisements, Morgan Stanley & Co.. new underwriting offshoot of the House of Morgan, headed a syndicate that offered $19,000,000 of Consumers Power bonds.