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.
