584 
APPENDIX 
corporations whose stocks are dealt in on the exchange, where, in a 
period of liquidation, what is known as the odd-lot buyer appears in 
the markets; then, with stock like that of the Steel Corporation and 
General Motors and others, you will find the number of stockholders 
increases tremendously in a declining market. Figures have recently 
been published in New York market reviews showing the changes in 
the number of stockholders in those two companies. And what hap- 
pens is that the public, in a declining market, see that stocks are selling 
at a bargain and come in with the cash, buy the stock, and take it out 
of the stock loan account.” (Statement and testimony of Governor 
Benjamin Strong of the New York Federal Reserve Bank before the 
Agricultural Inquiry Commission [ Washington, August, 1921], p. 630.) 
(IVk) The only current statistical indication as to the “technical 
condition” of the stock market floating supply as a whole consists in 
the ratio of Stock Exchange member borrowings on security collateral 
to the market value of all listed shares. The publication of the former 
was undertaken February 1, 1926. Statistics (also as of the opening 
of business on the first of each month) as to the market value of listed 
securities have regularly been compiled by the Statistical Department 
of the Stock Exchange since January 1, 1925. This ratio, although 
far from a scientific method of measurement, presumably does indicate 
the periods when the relative size of the floating supply has become, 
unusually great or unusually small. Thus, empirically, it did indicate 
the dangerous current technical condition of the stock market by rising 
to 10.23% on March 1, 1926, and to 9.83% on October 1, 1929. But 
the ratio can of course be deflected by the unusual use of bonds or 
unlisted securities as collateral. Also when both loans and stock values 
advance equally, the ratio might not change very much even when a 
condition of unusual inflation in both items had arisen. 
(IVI) DistriBUTION OF UNITED STATES STEEL COMMON AND 
PREFERRED STOCKS, 1910-1028 
Showing drift of shares from speculators (brokers’ names) to investors 
(individual names) 
CoMMON STOCK PREFERRED STOCK 
Date of Quarterly 
Statement 
December 31, 1909... 
March 31, 1910... .. 
June 30, 1910........ 
September 30, 1910... 
December 31, 1910... 
March 31, 1911...... 
June 30, 1911... ... 
Brokers 
r- 41 % 
nA 
~A 
5: 
8 or 
Individuals 
59% 
ie A 
of) 
- por 
Brokers 
57% 
2) 
02 
6 
4. 30 
Individuals 
82.43% 
83.21 
84.38 
85.02 
85.41 
85.41 
85.61