Deals & Developments

Shanghai Mutual. Greedy Chinese stockholders of Shanghai Mutual Telephone Co. last week began preparing speeches to be delivered at a stockholders' meeting in the near future. For with the stock selling at 80 taels ($36.40) on the Shanghai market, the telephone company's advisory committee had recommended acceptance of International Telephone & Telegraph's bid of 75 taels ($34.13), even though the Ericsson interests of Sweden, the Cable Telephone General Trust of England had both been higher bidders. Reasons advanced for accepting I. T. & T's low offer were that the company has a subsidiary manufacturing equipment in China now, therefore understands local conditions, can deliver new equipment at once.

Winton to GM. Because General Motors Corp., as yet, manufactures no airplane engines, significance was attached to its purchase last week of Winton Engine Co., 60% owner of Winton Aviation Engine Co. Added to GM's 40% interest in Fokker, 25% in Bendix Aviation, this new unit gives it complete entrenchment on airplane manufacturing. Other Winton ramifications include Diesel and gasoline engines for power plants, marine craft, rail motorcars.

Armco in Kansas. When scrap steel from the West and Southwest passes through Kansas City on its way to eastern mills, large quantities of it are apt to be bought by Sheffield Steel Corp., converted into nuts, spikes, barbed wire, blue annealed sheets, other steel products. Last week it was announced that American Rolling Mill Co., large manufacturer of sheet metal, had bought Sheffield, perhaps as the first move toward a diversification of Armco products. Sheffield Steel is not to be confused with Sloss-Sheffield Steel & Iron Co. of Alabama, larger in assets, mightier in directorate, but feebler in earnings.

Utilities. Stories of vast deals being brewed in the eastern utility field continued last week when United Corp. (famed Morgan-Drexel-Bonbright holding company) completed one strategic move, launched into another. The first United Corp. deal was to offer an exchange of its stock with that of United Gas Improvement Co. At the end of the exchange last week United Corp. held 26.9% of UGI's common stock. The second stroke was to offer an exchange of United Corp. shares for 25% of Columbia Gas & Electric common stock. If successful, this deal will give United a 27.9% interest in Columbia.

The motives behind these offers are many. Columbia Gas & Electric, largest U. S. producer of natural gas, plans to pipe gas to the Atlantic seaboard; a tie-up with UGI and Consolidated Gas of New York would be beneficial to all. Inclusion of Standard Oil of New Jersey's natural gas projects in this group is also mentioned. To secure these ends, United Corp. has been buying Consolidated Gas of New York in the open market, is reported anxious to add to its large holdings of Public Service of New Jersey (which UGI also has). Other companies in the Morgan group which may soon take part in similar developments are Niagara Hudson Power, Commonwealth & Southern. Less closely affiliated but considered sure to enter any new alignment is Consolidated Gas of Baltimore. American Superpower, through large investments in United Corp. and Commonwealth & Southern is linked with the situation, as is Electric Bond & Share. Probably never before have merger-mongers been given such a foundation upon which to base their rumors.

Pierce. Old among oil companies is Pierce Petroleum Corp. whose predecessor companies have been in the business since the first well was drilled in Pennsylvania, which claims to have been the first to use a tank wagon in delivering oil to retailers. Since dissolution of the Standard Oil trust, Pierce Petroleum has not done well. With four of its five refineries now too obsolete for use, it is not equipped to supply its many bulk and service stations in the U. S. and Mexico. Last week Sinclair Consolidated decided Pierce's distribution system would be a valuable addition to its own. offered to buy it. Said Chairman Harry Ford Sinclair: "This is one of those deals that are equally good for buyer and seller.'' Probably equally pleased by the deal was Samuel Untermyer, reported to be Pierce's largest stockholder, father of two Pierce directors.

Ford Denial. Fantastic but popular has been the rumor that Henry Ford & Son have bought control of National City Bank.

Last week the Ford office issued a statement, saying : "We rarely deny rumors and we do not intend to begin the practice now but this report was disseminated so widely as to call for denial. The Fords are not buying any bank stock anywhere." Prepaid Freight. With the ancient rumor of a merger between Sears Roebuck and Montgomery Ward once again laid low, last week there was evidence of a move of co-operation between the two. Prepayment of freight, a move originated by the two houses last summer, has been costly, now will be abandoned by both.

Alcohol Merger. Badly unsettled has been the industrial alcohol market. The merger remedy, evident among smaller companies, last week progressed to larger ones with the absorption of Rossville Commercial Alcohol Corp. and General Industrial Alcohol Corp. by American Sol vents & Chemical Corp. Combined assets of the three companies will be $21,000,000, consolidated 1929 earnings, $2,285,000. Still largest in the field is U. S. Industrial Alcohol, with earnings last year of $4,720,000.

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