Deals & Developments

British Union. The holder of a $ 1,000 defaulted South American bond would have a hard time getting satisfaction from the defaulting nation. One man speaking for holders of a billion dollars' worth of defaulted bonds might get somewhere. Cognizant of this, last week between 250 and 300 English and Scottish investment trusts, the investments of which are far flung, formed an association to deal with defaulters at home and abroad. Continental and U. S. trusts with mutual problems are expected to cooperate.

Sugar on Trial. Testimony-taking ended last week in the important case of United States v. Sugar Institute, Inc., its 16 member firms and 27 individuals. In 22 weeks more than 80 witnesses had taken the stand before famed Judge Julian William Mack who is trying the case without a jury. Their testimony has filled 10,550 typed pages and a shelf is packed with 10,000 documentary exhibits. To prove that no anti-trust laws have been violated, the defense is spending about $1,000,000, including fees to a battery of 50 lawyers. Last week after cross-examination of Columbia's Professor Edwin Robert Anderson Seligman by James Lawrence Fly, special assistant to the Attorney General, Judge Mack ordered a summing up twelve weeks hence.

Having had no summer vacation, Judge Mack thereupon packed up for a rest in Europe.

Battered Pulp (Cont'd). Newsprint, which dropped from $53 to $47.50 a ton fortnight ago when Price Bros, suddenly slashed its prices (TIME, Sept. 26), was hammered still lower last week. The price cut was no proud gesture but a desperate attempt to get business and cash. Last week the firm announced that its difficulties were so great that it will pass into the hands of its bondholders unless aid is forthcoming. Common and preferred stockholders may be called upon to assist. A committee was formed to protect preferred stockholders. One of its members is a representative of Lord Beaverbrook's London firm of Kitcat & Aitken (not to be confused with London's famed Kit Cat Club).

Last week International Paper Co. dropped its price to $46, a new post-War low. Further retaliatory cuts and demoralization were feared.

Pacific Pensions. Since U. S. businessmen ceased to regard labor as a commodity, they have tinkered plan after plan to care for employes grown old in service. Today nearly 600 corporations have pension plans. But few plans have escaped trouble at some time in their history with what is called "accrued pension liability." The moment a company promises retirement with pay it is not only obligated to pay the first group of pensioners from year to year but also must provide reserves to pay the groups that each year are automatically added. Even if the company does not grow, actuary tables show that this accrued liability is not made up for about 30 years--until pensioners dying equal employes pensioned. To meet this problem Pacific Lighting Corp. announced last week that it had signed a contract with Metropolitan Life Insurance Co., lumping its present pension plan and those of its subsidiaries into one. Payments are so calculated that as each employe is pensioned there is a fund immediately available to pay him as long as he lives. Unless its payroll is expanded Pacific Lighting will pay more during the first years (to cover accrued liability) than later. Initial payment was $633,350. In addition, employes will contribute 3% of their wages, about $300,000. If they leave the company their deposits will be refunded with compound interest. Because it estimated that two-thirds of its employes will either die or quit the company before they are eligible for pensions, Pacific Lighting expects to bear seven-eighths of the final pension costs.

This file is automatically generated by a robot program, so reader's discretion is required.