New Deals

U. S. investors, stockholders, last week considered many a new financing deal. The most outstanding:

Matches. A shrewd bargainer is Swedish Match Co. To obtain exclusive match concessions, it has lent money, bought securities from many impoverished governments. But Swedish Match is interested in matches, not money. And Swedish Match has an active and able financing company in the form of Kreuger & Toll Co., largest stockholder in Swedish Match, headed by Matchmaker Ivar Kreuger (TIME, Oct. 1). Last week, therefore, through a syndicate headed by Lee, Higginson & Co., Kreuger & Toll offered $50,000,000 debentures to acquire securities now owned by potent Swedish Match Co.

Worthy of note is Kreuger & Toll's financial statement. Net earnings in 1927 were $12,400,000; in 1928 they leaped to $21,000,000.

Bonds v. Stocks. Increasingly, finance committees of "big" U. S. corporations have voted to redeem bonds, issue additional common stock. One obvious and bullish reason might be to reduce annual fixed interest charges. Another reason, less obvious and less bullish, might be a desire to take precautions against hard times ahead. Should the U. S. find itself, in 1935 or 1940, in a general business depression, corporations would be glad of flexible capital structures. No such bearish suggestions, however, accompanied these developments:

1) U. S. Steel directors last fortnight proposed an increase in common stock from some 7,500,000 to 12,500,000, to redeem all bonds of the company.

2) Anaconda Copper Mining Co. last week voted to increase its outstanding capital stock by approximately 40%. Income derived from this increase will be used to retire $103,803,000 of the company's funded debt.

3) Last week, also, an increase of capital stock by $500,000,000 was planned by directors of mighty A. T. & T. Stockholders surmised that this move, like those of U. S. Steel and Anaconda, might lead to bond redemption. A. T. & T. will thus break one more world's record in size. It will be the first corporation with $2,000,000,000 capital.

Aviation Corp., nominally a $200,000,000 holding and development company underwritten by Lehman Bros, and W. A. Harriman & Co., Inc. They will at first offer only $40,000,000 of stock to buy substantial interests in all branches of aviation (plane manufacture, motors, accessories, transport). William Averell Harriman is chairman of the directorate, Robert Lehman chairman of the executive committee.

As Harriman is famed for the world-sweep of its interests--so Lehman is famed for almost sensationally successful financing in recent years. Significant is Lehman's entrance into aviation financing, which so far has interested only a few of the big houses--e. g., Hayden, Stone & Co., National City. P. W. Chapman, Pynchon. Salesmen of Aviation Corp. stock (which is not to be confused with Richard F. Hoyt's Aviation Corp. of America) suggested that it might become the Electric Bond & Share of aviation.