THE DISTRIBUTION OF SECURITIES 109
the floating supply is reduced to small proportions.” Over a
considerable period, however, and in the case of successful and
stable companies, the average 100-share lot, after an adven-
turous and speculative youth in brokers’ boxes and call loan
envelopes, slowly settles down into a calm and dignified old age
in the deposit box of some private or institutional investor.
But over shorter periods, the relative size of the floating
supply depends mainly on the price of the stock. When prices
rise sharply, there is usually a tendency for investors to sell
out to speculators, and consequently for the number of shares
in the floating supply temporarily to increase; conversely, a
swift price decline usually tends to incite purchasing by invest-
ors from speculators and a decrease in the number of shares
in the floating supply of the given issue. Such changes in the
floating supply of the stock market as a whole produce what
is often referred to as the “technical condition of the market.” 2*
In general, it is fair to assert that the speculators, by holding
the most shares at the periods of greatest risk, enable investors
to buy and sell more conservatively at all times.” For assum-
ing these unusual risks arising basically from the inherent vicis-
situdes of industry itself, speculators sometimes, although of
course by no means always, obtain the unusual profits which
the assumption of such risks justify.
The Example of U. S. Steel Stocks.—Definite statistical
evidence relating to the distribution of given security issues
as between speculators and investors is usually impossible to
secure. The principal exception consists of the very significant
statistics relating to its preferred and common stock issues,
which the U. S. Steel Corporation has published regularly since
[904.* Both issues have been large enough to preclude any
abnormal conditions in their distribution arising from any
unusual speculative purpose or condition. The U. S. Steel Cor-
poration has endeavored to distribute its stock to investors for
= See Appendix IVj.
3 Appendix IVk.
% See Chapter LR ss.
® See Appendix IVI.
