Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-27
INDUSTRY
BEING STABILIZED
Giant Mergers in Prospect as
Business Grows to Great
Proportions.
BY JOHN z. SINCLAIR.

Special Dispatch to The Star.
NEW YORK. September 27.-"No deal
has been made" was the comment OF
one OF the executives Of the Paramount
organization when asked about the
merger with Warner Bros.
Perhaps this executive was thinking
of the time last year when the purchase
of Metro 4 oldwyn-Mayer by the War
ner Bros. was o5 per cent in the bag
and then fell out.
Negotiations have been going on FOL
some time between the Paramount Or
ganization and Warner Bros. AT frst
Paramount was reported to be taking
over Warner, the late reports indicating
that q new company will be formed ia
involve an exchange Of two shares In
the new company for every share OF
Paramount and one and one-hali
shares for each share of. Warner.
If carried out this way there will be
$3.50, 900 shares Of capital stock out
standing with earnings Of about $780,
100000 year on the present basis.
When and II completed. no other
company would be within striking dis-
lance OF the Paramount organization
with the exception of Fox. Fox's re-
cent purchase OF the Metro-Goldwyn-
Mayer and Marcus Loew Theaters VIII
show combined net earnings OF from
SOS, 000, 900 to $4,000, 900 a year. The
Fox theaJeFs. including the 200 Loew
theaters, total now about 800. while
Paramount and Warner together Wouio
reach about 100. 3
Where will the Radio eth -Orpheun
Corporation fit in should such deal
be consummated? Will 1t Join hands
with one or the other Of these huge
organizations. or will 1t go 1t alone?
This is a problem of the future.
Unless there is a slip up, always pos.
sible, the motion picture industry vii
have chartered the lines of leadership
for probably the next decade. Para
mount, led by Adolph luxor. and ths
Fox organization. led by, william rex
both born In Hungary and both nov
in their early fifties&
When the. inevitable happened yes
terday and the Bank of England In
creased its discount. rate from 5la pei
cent to 6I2 per cent the central banks
of three other nations-Sweden. Nor
way and Denmark - Immediately fol-
lowed suit. Central banks Of other
European nations. perhaps a score OF
them, will no doubt fall In line.
/ The English rate advance has been
expected. 1t is at least four weeks
overdue! Already this year the banE
of England has lost net not less than
Sl1s. 600 600 in gold principally to
France, Germany and the United
States.
These advances and others to follow
are in line with the upward trend In
money rates which began last year.
Since the first OF this year no less than
10 central banks have increased then
rates. some of them more than once.
How long will people continue tc
borrow money, at 8 TO 10 per cent tc
buy stocks at prices which net from
l to 3 per cent?
Certainly. not forever!
The Midland Marine Corporation
formed only one week ago as holding
comnany to buy controlling interest in
strategic banks, was expected to con-
centrate in New, York State. . But its
FIRST act, after acquiring II banks In
Upper New York, was to add an ex-
tensive chain Of 16, possible 20, banks
in the rich industrial. and agricultural
sections of North Carolina, centerine
! around Raleigh and Charlotte.
Midland, therefore, takes just one
good bite and adds, without gulp
SIS 900 900 to its former resources OF
$575, 00O, 900.
Today this corporation, one week old
has assets of $4,000 900.
It is already announced that it will
sell 1000 900 shares of common stock
at $50. That stock when issued" is
now quoted at about $85 a share.
The $25,000000 of the $60,000,00O
income from the new issue will become
capital of the Marine Trust Co. of New
York. The remaining $35 100000 will
remain in their treasury as a revolving
fund to lend to the, banks they control
This cash. fund.-. which should grow
rapidly. is to be put into Government
securities. bankers acceptances and
Wall Street loans.
Sixteen banks in one State In q week
becoming very plain.
why should Canadian exchange be
quoted at a. discount Of 70 per cent
in the New York market?
Canadian. funds have continued to
decline for weeks and have now touched
the lowest point since 1924. 1t is very
0lmculL, lnueeu, 70 eHpldm inc large
discount quotation.
There Is, at the present time, a profit
of almost l per cent in the shipment
of gold in quantities of 81 100000 or
more from Montreal or Toronto to New
York. But very little gold Is coming
across from Canada.
The heavy discount against Canada
would seem to indicate that the transfer
Of gold is a wise procedure. That 1t is
not being done seems to show .that the
Canadian bankers believe that the sit
uation is only temporary and that Can
ada's Fall export business will tend to
right the matter without any subStan-
tial transfers of gold.
The New York Stock Exchange so far
this year has dealt in 900, 900 900 shares,
as against 100000 for the same
period OF 1928, 4O6,000,000 for 1927,
1872 100000 for 1925 and 29S, 000, 900 for
1925.
So the sales today are just about
double what they were four years ago.
This is in spite of and not because of
the high price for money. The excep-
tional rates now being paid for money
we're shown this week in the advance of
time money quotations to 9Z per cent.
"A loan for 90 days was arranged be-
tween q money broker and a borrower
for time money in five months.
But speculation, costly as 1t Is, con-
tinueS.
(Copyrisht. 1929. by North American News
paper Alliance.)