Deals & Developments

Postal Shift. Because of the outcry that was raised at revelation of how Kreuger & Toll, acting with full legal rights, had shifted the collateral behind its bonds, the New York Stock Exchange lately passed a rule that it must be notified immediately of such changes. More than two years ago Postal Telegraph & Cable made such a shift. It removed and retired Commercial Cable Co.'s first mortgage bonds and debenture stock, replacing them with Commercial Cable unsecured notes. The amount involved was about $20,000.000. Leading statistical services have been aware of the change, as have sharp-eyed investors. The New York Stock Exchange has known of the shift for some time, has willingly told all inquirers about it. Last week the Exchange's bulletin said "notice has been received" of the change. Newspapers copied it.

Postal Telegraph bonds, of which some $50,000,000 are outstanding, last week sold at 15-c- on the $1 against a 1932 high of 39-c-. In 1931 the company had its gross business fall only 8% against the total drop of 16% in U. S. telegraph business but its cable and wireless business was off sharply.

Last week Postal's parent, International Telephone & Telegraph, made its 1931 report. Salient points: 1) Net income: $7,654,000 against $13,750,000. 2) Telephones in the system provided 59% of the gross revenue, increased from 688,000 to 769,000. Of the gain 50,000 was from acquisition of the Rumanian system. 3) I. T. & T.'s telephone business is distributed as follows: South America, 534%, Asia, 3.2%, Europe, 27.9%, North America (Mexico) 7.8%, West Indies, 7.7%.

Although last year's earnings were more than double interest charges, last week I. T. & T.'s three bond issues sold at forebodingly low prices of from 19-c- to 24-c- on $1 and the common stock below $5. In March it was reported in the Press tha Clarence Hungerford Mackay, chairman of Postal, director and big stockholder of I. T. & T., had fallen in his bathroom hurt his head. Last week it was an open secret that Chairman Mackay still lay abed, worried and fretful, may never attend another board meeting.

"Other Income." Mushrooms grow in dark, cool places. Boston Elevated Rail way Co. last week asked for permission from the Massachusetts Department of Public Utilities to rent a portion of on. of its subway stations to a mushroom grower. No opposition developed.

5 1/2-c- On April 1 the copper industry agreed on a new ratio of curtailment which brought production down to 20% of capacity. It takes copper 120 days from mine to market so the effect has not yet been felt. Last week copper dropped to 5 1/2 per lb., lowest price in history Metal & Mineral Markets said nothing has occurred to bring on the present wave of pessimism. But observers thought that low prices, possibilities of complete shutdowns, might influence Congress' attitude towards a copper tariff.

Mirror to the Fight Feelings run hard in the soft drink industry where brand-names and goodwill mean much. On every can of Pepsi-Cola is the following label:

"$10,000 reward will be paid ... for information leading to the detection of any dealer substituting Pepsi-Cola for any other 5-c- drink."

Obvious reason for the label is to show that Pepsi-Cola is not being sold deliberately as a substitute for Coca-Cola. When Coca-Cola Co. saw the label it scouted about, wrote Pepsi-Cola Co. last month that "your product ... has been and is now being substituted and passed off for Coca-Cola ... at ten Loft, six Happiness and seven Mirror stores. . . . This detection . . . entitles us to the reward . . . and we herewith . . . make demand upon you for the payment ... of the sum of $30,000."

Last fortnight Loft and Pepsi-Cola answered with $7,000,000 worth of damage suits, charging Coca-Cola has maliciously attempted to break Pepsi-Cola's contracts, to hurt Loft's business (TIME, May 16). Last week the Mirror stores (operated by Loft) joined the fray and brought suits for $1,250,000 in damages. A million dollars was asked for general interference with the Loft-Mirror-Pepsi-Cola contracts, charging that Coca-Colans had bribed Mirror employes, had attacked Mirror's stock, had interfered with customers, had stolen goods. The second suit for $250,000 was because of Coca-Cola's letter to Pepsi-Cola which, said Mirror Stores, had injured its good name, credit, business.

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