The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IV. The distribution of securities

Collection:: Economics Books

110 THE WORK OF THE STOCK EXCHANGE many years, during which the company has proved a conspicu- ous financial success. The quarterly reports published by the Corporation give the proportion of both its stock issues which stands respectively in brokers’ and in individuals’ names (Fig- ure 6). While a little of the former may really represent investment, and some of the latter bé held for speculative pur- poses, nevertheless in a general way it is fair to consider stock standing in a broker’s name as part of the speculatively held floating supply, and that standing in the name of an individual as investment stock.” On the basis of this assumption, a comparative examination of these quarterly reports of the U. S. Steel Corporation from 100g to 1920 shows that on December 31, 1909, 66.41% (or about two-thirds) of the common stock was in the floating supply, and only 33.59% (or about one-third) held by investors. Six years later, on December 31, 1915, 49.80% (or about one- half) of the same issue was speculatively held, and 50.20% (or about one-half) held by investors. On December 31, 1929, 21.21% (or only about one-fifth) remained in the floating supply, and 78.79% (or almost four-fifths) had been absorbed by investors. This is a striking illustration of the tendency of a stock to shift from speculative to investors’ hands as it becomes seasoned over a long period of time. The more complete diminution of the floating supply of an investment security as contrasted with that occurring in a more speculative common stock is furthermore shown by the similar statistics relating to Steel preferred, which has long been con- sidered by many to possess investment features comparable to those of the average bond. On December 31, 1909, I7. 57% of this preferred issue constituted its floating supply, but by December 31, 1915, this had shrunk to 11.1 5%, and by Decem- ber 31, 1929, to only 7.01%. The short-term tendency of the floating supply to expand or contract in accordance with rises or declines in the price, ~ # Appendix IVm.

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