Tri-Continental

Jefferson Seligman is 72. He often brings flowers to the office and gives them to the other men who form the partnership of J. & W. Seligman & Co., the firm which his father and seven uncles founded 68 years ago. More serious minded than his fun-fond cousin is Henry Seligman, 74, whose son, Walter, 36, represents the third generation of the partnership. The principal partner, the Sage of Seligman, is Frederick Strauss, 70, a deeply cultured, aristocratic financier. He loves poetry and quotes it easily. Under the Strauss prestige, Seligman & Co. has gone about its business quietly, politely, and is respected by Wall Street. Yet there is nothing antiquated about its methods. Early in 1929 Seligman & Co. reached an important decision--to follow financial fashion and form an investment trust. But it did so with a difference which was typified by the man chosen to head it. He was Earle Bailie, who abandoned a promising law career in 1919 to enter finance and proved his astuteness so quickly in 1923 he was made a Seligman partner. The Tri-Continental directorship includes such important "outsiders" as Albert Henry Wiggin and Clarence Edward Groesbeck, president of Electric Bond & Share, but its management is distinctly from within. Its research staff is large and skilled, and Mr. Bailie places great faith in the "field trips" which his men take to survey business throughout the U. S. at first hand. TriContinental takes great pride in being the first investment trust to publish its portfolio after the stock-market crash. Last March its assets stood at $77,000,000 against $83,000,000 a year ago.

Less successful has been the history of Selected Industries, Inc., an investment trust formed about the same time as TriContinental. The purpose of this trust was not merely to invest, but to give financial and managerial aid to those situations in which it took a position. Its backer was Richard Samuel Reynolds, 49, an active and successful businessman. In 1905 at the age of 24 he went to work for his uncle, Richard Joshua Reynolds of R. J. Reynolds Tobacco Co. He was soon a vice president and for his good work (including the development and marketing of Prince Albert) was offered a salary of $100,000 by the company when in 1912 he decided to go into business for himself. His first experience was in the foil industry, and in 1928 he formed Reynolds Metals Co. by merging four important companies in this line. He also formed Eskimo Pie Corp., control of which is held by Reynolds Metals.

The investments of Selected Industries have fallen off badly, and on Jan. 22 had a market value of but $49,000,000 against, a cost of $66,000,000. The benefits of its aid have not been materially apparent. Last week the management of the company (which two months ago assured stockholders it had "patience to ride out the Depression") announced they considered there is no opportunity at present for this sort of an investment trust. They therefore resigned, placing the management of the company in the hands of Seligman's TriContinental Corp.

To a conservative, diversified investment trust of TriContinental's nature, handling of Selected Industries will cause much activity in the research department. It has a substantial interest in Thomas Young Nurseries, a New Jersey orchid farm, and is a large holder of Missouri-Kansas-Texas Rr. (100,321 shares). It has large tobacco investments including 102,-580 P. Lorillard, 29,000 Liggett & Myers. It has a "special interest" of 55,109 shares of Case, Pomeroy & Co., a securities house whose shares appear also in Reynolds Investing Co., Inc.

Perhaps most interesting of Selected Industries' selections is 136,436-700/1000111 shares of National Dairy Products Corp. In 1929, before the break, it was known that Selected Industries had large holdings in Kraft-Phenix Cheese Corp. and hoped to merge that company with some others (Hershey Chocolate, Colgate-Palmolive-Peet) under the name Quality Products. The market broke, the bank interested in the deal lost interest, Kraft-Phenix finally was acquired by National Dairy Products, and another plan went to corporate ghostland.

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