MEDKOKD MAIL TRIBUNE. MEDFORD. OREGON
FRIDAY, SEPTEMBER 27, 196U
Higher Properly
Taxes Predicted
II Bill Defeated
SALEM (UPI) - An "almost
certain" increase in property
taxes if the tax measure is de
feated Oct. 15 was predicted
at a Salem meeting Thursday
night.
Myron Katz, a U.S. Govern
ment economist and former in
terim committee tax consultant
for the Oregon legislature, gave
a strong endorsement to a "yes"
vote on the tax measure in an
address to the Salem Jane Jef
ferson Club for Democratic
Women.
The club voted unanimously
to go on record in favor of
the tax measure and to urge
their counterparts, the Republi
can Petticoat Pollies Club, to
issue a similar endorsement and
join the Democratic Women in
soliciting public support for the
measure.
Oregon has not had a state
property tax since 1941, Katz
said, and the new measure is
designed to help reduce present
county property taxes. It can
be defended on its merits, he
said, because it preserves this
state's traditional principal of
taxation based on ability to pay
together with a more equitable
tax rate structure and a broad
ened tax base.
Passage of the tax measure
would be "eloquent testimony
that the people of Oregon do
not intend to default in their
responsibilities as good citizens
in a modern world," he said.
Defeat of the measure could
be "catastrophic" because it
would plunge the state into a
financial crisis which would dis
courage industrial development,
seriously impair functioning of
government, j e o p a r dize all
levels of education, and could
result in the first major new
taxes in Oregon since 1929,
Katz said.
Patterson Elected
UAL Board Chairman
CHICAGO - United Air Lines
board of directors have elected
W. A. Patterson chairman of
the board and chief executive
officer. It is the first time the
position has existed in United.
George E. Keck, former ex
ecutive vice president and gen
eral manager, was elected pres
ident.
Patterson, whose airline ca
reer began in 1929, has been
president of United since 1934
when four predecessor compa
Republicans Claim Stockpile Program Report 'Slanted'
WASHINGTON (UPI)-A con.
troversial report on the nation's
multi - billion dollar stockpile
program, charging cabinet-level
favoritism during the Eisenhow
er administration, was branded
as "slanted" Tnursaay oy Re
publicans.
Sen. Stuart Symington CD
Mo.) chairman of the special
stockpile investigating subcom
mittee, made the 100-page docu
ment public at a hastily called
news conference following a se
ries of partisan charges and
counter-charges over its con
tents. Prominently featured in the
report was a critical review of
the roles played by former
Treasury Secretary George M.
Humphrey, ex-Commerce Secre
tary Sinclair Weeks, and one
time cabinet member Arthur S.
Flemming during the time he
served as director of the Office
of Defense Mobilization. But
Humphrey appeared to be the
chief target.
Political Motivation Claimed
Republicans said the report
was "politically motivated,"
and charged it was compiled
with the aid of personnel from
President Kennedy's office.
Symington released the report
despite a 3-to-3 voting deadlock
in the subcommittee against ap
proving it. During a closed ses
sion earlier in the day Demo
cratica Sen. J. Strom Thur
mond of South Carolina lined up
with two Republicans, Sens. J.
Glenn Beall of Maryland and
Clifford P. Case of New Jersey,
in opposition.
Symington was supported by
Democratic Sens. Howard W.
Cannon of Nevada and ailing
Clair Engle of California, who
voted by proxy.
Ike Defends Policies
Case later issued a letter
from Eisenhower defending
stockpile policies during his
eight years in the White House
Portland-Medford
Flight Started by WCA
SEATTLE (UPI) West
Coast Airlines said today it has
Coast Airlines said Thursday it
has inaugurated a non-stop flight
leaving Portland daily at 8:35
a.m. .
It said the 70-minute flight
was the only direct air connec
tion between the two cities. The
speedup also will affect flights
to Sacramento via Klamath
Falls.
The flight from Medford to
Portland stops at Eugene. It
leaves Medford at 3:55 p.m. and
arrives at Portland at 5:20 p.m.
Timber resources on the pub
lie domain of the U.S. have an
nies were combined into one estimated current value of more
corporate organization. I than $100 million.
Your Money's
Worth
By SYLVIA PORTER
Copyright, Halt Syndicate, Inc.
as necessary in the national in'
terest.
Beall charged the report was
"slanted in its approach, lack
ing in objectivity and unwar
ranted in the attacks it makes
on former, government offi
cials."
He said that although the pro
gram of stockpiling strategic
and critical materials for emer
gency purposes began under
former President Harry S. Tru
man, the report concentrated on
the Eisenhower policies of 1954-
1958.
"I am shocked the respected
officials of the Eisenhower ad
ministration are made the ob
jects of unjustified charges
through the use of distortions,
omissions and misinterpreta
tions," Beall said.
The report said that during the
Korean War emergency "some
contractors enjoyed excessive
and unconscionable profits from
their sales of . . . commodities
to the government. This was
particularly true in nickel."
President Kennedy made the
same charge in the same terms
when he sparked the investiga
tion in early 1962.
Windfall Profits Charged
The report charged that M. A.
Hanna Co. mining and smelting
enterprises, controlled by the
Humphrey family, enjoyed
windfall profits of more than
$17 million on a government
built nickel plant, and also prof
ited from premium prices on its
sales of nickel to the national
stockpile of strategic materials.
A multi-millton-dollar Calu
met & Hecla Co. copper con
tract represented a "clear in
stance of special treatment and
high-level official interference to
the advantage of one contractor
and to the substantial disadvant
age of the government," the re
port said.
In 1955, the report said. Hum
phrey, Weeks and Flemming,
then head of the Defense Mobil
ization Office, worked out a deal
favorable to Calumet & Hecla.
Eventually, Calumet & Hecla
gained a $5.5 million windfall
through forgiveness of delivery
delays and other benefits ap
proved by the Eisenhower cab
inet members, the report
charged.
Government nickel contracts
with Hanna Mining Co., the Han
na Company's subsidiary, as
sured the concern of future prof
its totaling approximately $86
million, the report said.
To Introduce Legislation
"Under this arrangement . . .
the government exposed itself to
the possible loss of upward of $30
million; whereas Hanna did not
expose itself to any loss of any
kind whatsoever," the report
charged, adding that during the
time the stockpile contract was
in force Hanna Company's prof
its were almost five times the
mining industry's average.
Humphrey clashed repeatedly
with Symington during the sub
committee's public hearings last
year. He charged later that the
Democrats were using the in
vestigation to get at former
president Eisenhower.
Svmineton said reform leeisla-1 would be introduced shortly, i Among other things, the report ed speedier disposal methods
tion designed to improve the About $4 billion worth in the recommended that the major and use of surplus stockpiled
vast $8.9 billion program of stockpile has been
stockpiling strategic , materials 1 termed surplus.
tentatively stockpiles be consolidated for metals in certain defense con-
1 better management, it aavocat- tracts ana loreign aid projects.
NOT IMMEDIATE CURE
PORTLAND (UPD-So-called
"freezing" of the stomach does
not offer an immediate cure for
peptic ulcers, a team of Uni
versity of Oregon Medical
School specialists told the Ore
gon Medical Society Wednesday.
A 3
SALEM (UPI) Gov. Mark
Hatfield and an Oregon Techni
cal team met with executives of
the Du Pont Company in Wil
mington, Del., Thursday to dis
cuss opportunities for Du Pont in
Oregon, the governor's offica
announced.
PRICE-EARNINGS RATIOS AND YIELDS
Measured by some of Wall Street's most treasured yardsticks
stock prices on average again are moving into very high ground
For instance, the average price-earnings ratio of the 30 stocks
in the Dow Jones industrial average is back above 19-to-one
approaching the high ratio reached at the end of 1961 when the
market crash began and well above the ratio touched in mid'
1962, when this stock average hit its low.
As another illustration, the average yield of the 30 stocks in
this popular average is back below 3'i per cent approaching
the low yield reached at the 1961 market peak and well below
the yield touched at the 1962 market bottom.
What is a "price-earnings ratio"? What is a "yield"? How
can you compile these figures on stocks you own? If you're
typical among America's millions of stockholders, you've read
and heard these terms many times but no one has explained
them in two-plus-two-equals-four language, nor put them into
perspective. Here goes.
(1) A price-earnings ratio is the relationship between the
price at which a stock is selling and the company's earnings
per share. Since a stock reasonably is supposed to sell at a price
reflecting to an extent what the company is earning today and
i. likely to earn tomorrow, the importance of this ratio is gen
erally acknowledged.
Say ZYX stock is selling at $100 a share. Say the company's
earnings work out to $5 for each share of stock outstanding.
You divide the market price of $100 by the $5 earnings per
share and you get the price-earnings ratio of 20-to-one.
How high is today's average of 19.1 on the Dow Jones 30 in
dustrial stocks? Historically, it's high, but that does not mean
it's too high and won't go higher.
At the end of 1950, when the market's upsurge was in
It Infancy, the price-earnings ratio of the Dow Jones aver
age was a meager 8.4-to-one. At the peak of the average
In late 1961, it was a spectacular 23.4. At the low in mid
1962. It was a more sober 16.5.
The key point is that price-earnings ratios vary tremendously
from stock to stock. A high ratio may simply reflect Investors'
enthusiasm for a stock on the basis of its growth prospects and
future earnings. A low ratio may reflect investors' worry about
an industry's future. Electronic stocks illustrate the first ratio,
tobacco stocks the second.
(2) A yield represents what a company is paying in annual
cash dividends on its stock as a percentage of the stocks' price.
Since the return investors can earn on a stock reasonably influ
ences the decision of many to buy it, the importance of yield
also is generally acknowledged.
Say that ZYX stock, selling at $100 a share, pays $3 a year
In dividends. You divide the cash dividend of $3 by the market
price of $100 and you get the yield of 3 per cent.
How low Is today's average yield of 3.23 per cent on the
Dow Jones 30 Industrial stocks? Historically, it's low, but
that does not mean It's too low and won't go lower.
At the end of 1953, the yield on the Dow Jones average
was Sv4 per At lne 1Mt market peak, it was 3 per cent.
At the mid-1962 price low, it was 4 per cent.
Once more, the key point is that yields vary tremendously
from stock to stock. A very low yield simply may reflect the
fact that a company is putting most of its earnings into its
own future business, and buyers of its stock are betting on that
future. A high yield may reflect the fact that while a company
continues paying good dividends, investors question its future.
Electronic and tobacco stocks again illustrate both extremes.
The moral is fundamental. You cannot invest successfully
on the basis of yardsticks or averages or cliches. This stock
njarket is extraordinarily selective and professional. You must
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