Banking and finance

Media

Part of The American Chamber of Commerce Journal

Title: Banking and finance
Creator: Leaber, C. R.
Language: English
Source: The American Chamber of Commerce Journal Volume XXIV (Issue No. 8) August 1948
Year: 1948
Rights
Fulltext: one hand, and in all of the territory of Spain, on the other hand, the right to acquire, possess, and dispose of movable and immovable prop erty, to establish and maintain schools of learning, as well as the privilege to reside, travel, and engage in trade, industry, and other peaceful and lawful pursuits.” July 26 — The President inducts into office the mem bers of the Capital Planning Commission, and also two new Governors of the Rehabilitation Finance Corporation, — Messrs. Eugenio Ealdama and Carlos Rivilla. The Cabinet considers plans for the utilization of the $22,500,000 granted the Philippines by the American Congress in the Rogers Act which provides for the con struction of hospitals for Filipino veterans. Four hospitals may be built, one in Manila, another in Baguio, and the two others somewhere in the Visayas and in Mindanao. The Act also provides for grants for the operating expenses of these hospitals for a period of 5 years, not to exceed $3,285,000 a year. July 27 — Nicolai Aall, envoy extraordinary and minister plenipotentiary of Norway to the Republic of the Philippines, presents his credentials to President Quirino. July 28 — The President issues Executive Order No. 158, creating a Labor-Management Advisory Board to assist him and the various labor agencies of the Govern ment in connection with labor policies, problems, and dis putes. The Order reads in part as follows: Whereas, the relations between labor and management are at times marred by industrial disputes.arising from a misunderstanding of their mutual rights and obligations; “Whereas, it would be to the interest of industrial peace, which is the only climate under which a speedy rehabilitation and develop ment of our country is possible, that industrial disputes be at least minimized, if not altogether avoided, through an amicable adjustment of labor disputes; and for this purpose, there is need of an agency which will help bring labor and management to the best understanding pos sible; and “Whereas, the problems of labor should be approached, from the broadest perspective compatible with the just exercise of the right of management to direct its enterprises; “Now, therefore, I, Elpidio Quirino, President of the Philippines, by virtue of the powers vested in me by law, do hereby create a LaborManagement Advisory Board which shall be composed of a Chairman and such members as the President may appoint. One-half of the members shall be-chosen from labor and the other half from manage ment elements of the country. The members of the Board who are not government officials shall receive such per diems as may be fixed by the President. “It shall be the duty of the Board to assist the President of the Philippines in the formulation of the labor policies of the Government; to advise the Secretary of Labor with respect to the administration of labor laws; to study ways and means of preventing or minimizing industrial and other labor disputes, and to assist the Secretary of Labor and the other agencies of the Government in endeavoring to reconcile the parties to an industrial strife and inducing them to settle the same amicably. . .” He also issues Proclamation No. 84 designating the period from August 19 to September 19, 1948, as "anti Tuberculosis Month” and authorizing the Philippine Tuberculosis Society to conduct a national fund and educa tional drive during this period. July 30 — Despite the fact that few Huks have as yet presented themselves under the terms of the Amnesty, President Quirino states at a press conference that the situation is "encouraging”. He states that he is more concerned with his social amelioration program and the return of the dissidents to their farms than with the im mediate surrender of their fire-arms. With respect to trading with Japan, he states that the geographic factors can not be ignored and that relations will some day have to be restored. The policy so far has been to deal with Japan not as a sovereign country but as a country being administered by SCAP, and that the trade so far carried on has been to Philippine advantage. Asked to comment on the plank in the Wallace Plat form for the repeal of the Bell Act, he states that the Act has not worked to the disadvantage of the Philippines and that if it ever did, there is always open the recourse of terminating it. In answer to a statement made in a speech by Col. R. R. McCormick, publisher of the Chicago Tribune, before the American Club in Paris, as reported in the press. President Quirino issues the following: “Our financial, trade, and military relations with the United States are all based <fn bilateral covenants. The Philippines was actuated to enter into these covenants by its desire to open its resources to Amer ican investments, which we consider of great help to our economic development and, what is more, to our immediate reconstruction and rehabilitation. “The military agreement with the United States was entered into by the Philippine Republic on a mutually beneficial basis; namely, for the protection of Philippine and American interests in this country and for the maintenance of peace in the Orient. “We never accepted, as we can not accept, American direction of our military and financial positions. Mutual assistance is the essence of such pacts ...” Banking and Finance By C. R. Leaber Manager, National City Bank of New York BUSINESS news is showing little change from month to month and the velocity of commercial transac tions during July continued the slow pattern of the preceding several months. The effect of war-damage payments is being felt in the economy, and money in circulation continues to in crease month by month. Bank deposits are higher. Banks’ loan portfolios are also up, but percentagewise are not keeping pace with the growth in deposits. Merchants report that collections have improved somewhat, but inventories are still heavy in many lines of merchandise. There has been some decline in buying power, following lower prices for copra, abaca, and other export products. Importers are following conservative policies in placing orders. Markets are now well supplied with consumer goods, in the United States, as well as here, and mer chants can keep commitments down without fear of being caught short, which has been one of their principal worries in recent years. Consumers’ requirements are being satis fied and distributors’ stocks are filling up. The oppor tunity for speculative run-ups and speculative profits has diminished, and the situation is healthier for these changes. Foreign exchange quotations have not altered during the month, though dollar demand was somewhat easier. The General Banking Act, companion legislation to the Central Bank Act, was passed by Congress during the Special Session, and with the approval of the President, has become law. 'E'ven a cursory glance at the appended comparative • * “' figures indicates that the main trend of business is still inflationary. The cost of doing business is higher and more credit is being used now than a year ago. If pre-war records were available, the comparison would be even more striking. Comparative Financial Summary of thirteen Manila banks compiled from reports issued weekly by the Bureau of Banking: Loans, Discounts and Advances (monthly averages) (000 omitted) ♦June, 1948 “May, 1948 June, 1947 P383.841 P381.008 P293.073 Total Bank Resources (monthly averages) (000 omitted) ♦June, 1948 “May, 1948 June, 1947 P931.207 P895.019 P755.913 Bank Deposits (monthly averages) Public funds not included (000 omitted) . ♦June, 1948 “May, 1948 June, 1947 P448.864 P415.027 P372.128 287 Debits to Individual Accounts (monthly averages) (000 omitted) *June, 1948 “May, 1948 June, 1947 P113.944 P117.993 P96.963 Currency in Circulation (monthly averages) (Circulation Statement issued by Treasurer of the Philippines) June 30, 1948 May 31, 1948 June 30, 1947 P810,780,079 P798.775.645 P716,447,804 ’Compiled from reports to June 19 only, to be corrected in next issue. ’’Corrected figures. The September contract for New York Sugar closed the period at 5.21, as compared to 5.18 a month ago. Ad vices from New York dated July 16 reported production from Cuba at somewhat over 6,655,000 short tons, with one mill still grinding. Pressure on the Agriculture De partment to increase the United States sugar quota, caused some trade members to adopt a waiting attitude pending further action in this direction. American Stock and Commodity Markets June 27 to July 27, 1948 By Roy Ewing Swan, Culbertson Fritz THE feature of the New York stock market during the past month was the sharp break between July 14 and 19 when the Industrial Average declined from 190.66 to 181.20. The crisis in Berlin and the resulting threat of war was undoubtedly the main influence. Previous to this break the market had acted well, especially the Rails, which Average went up to 64.95 on July 14, a new high since 1946. Since the 19th, moderate rallies have brought the Industrial Average back to 184.17 at present writing. In addition to the international situation, there were other bearish market influences. The inflation spiral was boosted by Big Steel’s wage increases, which followed similar previous hikes in the motor, railroad, coal mining, and other industries, with resulting rises in prices; there was nervousness over the special session of Congress, and the effect to some industries of the bumper crops (see be low). On the bullish side were continued reports from numerous companies of record high earnings and dividendsThe United States employment figure was at a record alltime high, as Were several other business indices. Con sumer spending was on the increase and acting as a cush ion. As yet to have its effect, was the Marshall Plan and the defense spending, which is still in the allocation stage. From the 1948 lows in February and March, to the highs in June and July, the Industrial Average rallied 27.77 points, the Rails 16.82. The recent break erased 43% and 32% of these respectively. According to the Dow Theory, a normal secondary reaction retraces from one-third to twothirds of the previous move, so the recent break is well within these limits. As pointed out in this column last month, a break in the Average to between the 180 and 185 levels would, according to the Theory, be a buying spot, and we continue to hold to this opinion. As confirmed by the Averages in May, the primary trend is bullish. /Commodity prices were mixed but generally easy. New York spot Cotton is 33.90 today as compared to 37.26 on June 28, the gradual drifting toward loan level being a result of good to excellent crop news. Export pros pects were reported a little brighter, but European Co operative Administration business was slow in developing. July Wheat in Chicago declined from 232-1/4 on July 1 to 225-1/4 on July 16, but rallied sharply to 236-1/2 on July 23, the expiry date for July contracts. The Depart ment of Agriculture’s latest estimate predicted the second biggest harvest in history. Chief support was due to known export needs and indications that large amounts will be impounded under the loan. July Corn also declined from a high of 222-3/8 on July 1 to 199 on July 10; it rallied to 212 on July 23. The Government’s estimate was for an all-time record crop, 2% above 1946. A strong live stock market with both cattle and hogs touching all-time highs at Chicago, was a favorable influence. Manila Stock Market June 18 to July 15, 1948 By A. C. Hall A. C. Hall & Company MINING SHARES . MINING shares have drifted steadily downwards during the past month under mild but persistent pres sure. The principal bearish factors were the Court of Industrial Relations decision in the Consolidated Mines case, issued around the middle of June, and, latterly, the worsening Berlin situation. In regard to the former, there is apprehension that the decision may set a pattern for the entire mining in dustry. As some mines are already staggering under high costs and war losses, any additional burden at this time would be unfortunate. The case in question was submitted to the Court in March, 1947, and remained pending for a period of about 15 months. The Union received a substantial wage in crease which was made retroactive to May, 1947. In ad dition, the Company was ordered to pay a wage bonus of 50% on all work performed between sunset and sunrise. The estimated cost of this decision is approximately half a million pesos. The Company has filed a petition for reconsideration. At today’s closing'level, the market average is once again in the area of the year’s lows. In view of the worsen ing international situation, it appears that some further decline is likely. High Low Close Change Total Sales Manila Stock Exchange Average. . 102 87 93 51 194 41 Off 9 06 Acoje Mining Com355 P .34 P 32 Off .03 119,000 Antamok Gold-' fields...................... .02 02 02 Off 005 149,778 Atok-Big Wedge Mining Co........... .72 .66 .67 Off 05 217,500 Baguio Gold Min ing Co................... 044 .044 .044 Up .004 20,000 Batong Buhay Gold Mines.................... .0058 0054 .0054 Off .0004 1,070,000 Coco Grove, Inc- 023 023 023 Unchanged 20,000 Consolidated Min es, Inc................... Itogon Mining Com pany...................... .013 0115 .0115 Off 0015 6,720,000 08 075 .08 Off 01 200,000 I. X. L. Mining ¥ Company............. .0775 0775 0775 Up 0075 120,000 Lepanto Consoli dated .79 .75 .76 Off 03 250,000 Masbate Consoli dated ..................... 042 04 .04 Unchanged 70,000 Mindanao Mother Lode Mines......... 80 .65 .67 Off 15 312,000 Misamis Chromite Co., Inc................ 275 .25 .275 Off 005 210,000 Suyoc Consolidated 035 032 032 Up .002 155,000 San Mauricio Min ing Co................... .25 195 21 Up .025 151,000 Surigao Consoli dated .37 .34 32 Off .04 309,433 United Paracale Mining Co.......... .0825 .0775 .0775 Unchanged 85,000 2 88
pages: 287-288