Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-08
OFFICIAL EXPLAINS
R.C.A. STOCK JUMP
Col. Davis Says Imagination
of Public Has Wrought
Sensational CIin',.
BY MARTIN COnEL.

= JuSC what IS the basis or this sky
Tocketing Of the stock market, especially
in radio. which went SO high?"
This question was put yesterday By
Senator FeSs of Ohio 10 Col. Mantou
Davis, vice president and general at
tofney of the Radio Corporation OF
America at the Senate hearing or
radio It elected what is, so far as
known, the first public reply ever made
by an official of the company whose
stock gyrations have been the sensation
of the world OF finance
The essence of the reply was that the
) public is so intrigued by what has al
ready come out of the radio laboratories
that it is Observation-Disclosures rightly
or wrongly, no one will venture to say
of more and newer marvels. This is
the way Col. Davis answered, gripping
the attention of every member of the
Senate committee.
My opinion is all can give you.
viii say that the price of the stock OF
the Radio Corporation is as much a
surprise to those inside of the corpo-
ration as 1t is to those on the outside.
Not Easy on Workers.
"There are great many of us who
have our noses to the grindstone, at
tempting to earn for those who invest
money in the stock dividends on the
investments they make, that find our
selves in no small degree embarrassed by
the value that people in the market puc
on the stock, and the consequent ex-
pectation that investors have in the
returns they may sometime realize on
easy for those who work for the cor
poration to have such high value
placed on the stock itself.
Nov there are great many new
things peeping out Of the laboratories
in radio. The interest of the public
in radio receiving sets has been very
great. The pyralniding volume of radio
receiving sets Is a constant surprise to
those of us who work for the corpora
ton.
I'VE have budget of orders and for
the last several years that budget Of
what We expect the manufacturers to
produce for the whole year Is over
reached before half the year is gone.
1t is very difficult to adjust production
to demand.
Then I have told you of the contri-
button that radio has made to the
talking machine art; that is, the ortho-
phonic and panatrope devices are radios
contributions. That has interested the
public.
Then the talking movies have very
largely been developed in the radio
laboratories.
Television Leaked Out.
"Television is In the process of being
developed. I do not know how televi-
sion escaped out of the laboratory door
to be talked about, but 1t came out too
soon. Those things always embarrass
the companies. People expect a great
many things from television.
Altogether the development of radio
has been so fast, it has been so spec
tacular, there have been so many diff
ferent fields that have been opened up
by radio laboratory development, that
the public evidently is intrigued and
sees the possibility of a reproduction
Of the Ford experience or of the tele-
graph or of the telephone or any of
these great things wherein some people
invested few hundred dollars in the
early stages and lived in affluence
thereafter.
ut is the imagination of the public"
Such a tenuous thing as public mag
nation, however, Is bolstered by the
Radio Corporation of Americas fiscal
report just rendered, from which Col.
Davis cited figure slightly in excess of
Sl8,000,000 as the net profits for 1928.
Yet when Senator Watson asked
whether the price of radio stock Is not
"a good bit psychological" the r. c. A.
official responded:
81 think it altogether psychological,
sir" Then he added that there is no
fight for control Of the stock, so that
its speculative value cannot be attrib-
uted to such factor. He reminded the
Senate committee that this matter of
increase in stock, market values is not
In any degree confined to radio" but
"goes over the whole Bourse."
No Dividend on Common.
Col. Davis asserted that he knew of
no officers or directors Of the corpora
ton who have profited to any apprecia-
bic extent by the soarings Of the r. G. A.
stock. He pointed out that no common
stock dividends have ever been paid.
There are 1900 stockholders, he said.
Upon Senator Wheeler's request, Col
Davis read partial list of the stock
holders, making the statement later
that he did this "unwillingly'' and only
'lest the conclusion of illegality In the
ownership Of stock be drawn from
silence"
AS of December 81, 1927, he said, the
General Electric Co. held 248,106 shares
of common stock out of !, 1885, 400 shares
outstanding. It held also 27,08O of
preferred stock out of 395,597. West
mghouse holdings of the same date
were 27.760 of common and $4,000 pre-
ferred.
New York brokerage house holdings.
mostly in trust for clients, were given
as of August, 1923, but Col. Davis de-
clared the figures have doubtless changed
considerably since that date. The par
tial list revealed was as follows:
j. S. Bache, 10,373 common and 625
preferred; Arthur e. Brown and George
o. Moore, trustees under the viii of T.
Fl. Gibbon, 5000 common and 1880
preferred; Fl. Content & Co., 31.79O
common; Dominick e. Dominick, 1873
common and 80 preferred: Hornblower
& Weeks, 10,406 common and iii nre-
fel:red and w u II,,tt<,.. e. = :. = a