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Six

    WHERE ARE THEY NOW?


   As the TNEC data are more than twenty-five years old the questionnaturally arises: Are these large holdings of wealth still extant? Have they notbeen destroyed by ruthlessly vicious taxation? Aren't the large heirs--under pressurenot only of a monstrous tax burden but of militant trade unions, draconic governmentregulation, intense competition with each other, hostile legislators, public welfareschemes at home and Communist inroads at home and abroad--really in reduced and increasinglyprecarious circumstances?

   The sociologist C. Wright Mills, as noticed in Chapter 2, note2, found difficulty in ascertaining who was wealthy. He spent a good deal of timemaking inquiries of people supposed to know and who, though sympathetic to his quest,found the question of identities equally mysterious. He was reduced to culling namesas they had been more or less randomly mentioned in various books and by authorsdealing with unsystematic data and constructing his own architectonic symmetriesfrom them.

   While it cannot be claimed on the basis of any available collectionof data that one has unearthed every wealthy person and clan, the means are at handfor making far better contemporary determinations than did Mills, who was apparentlynot aware of the monumental TNEC data. But even the TNEC findings are continuallybeing supplemented in monthly reports of significant securities transactions, requiredby law, to the United States Securities and Exchange Commission (SEC), Moreover,any new issuance of securities by an existing company, or in the launching of a newcompany, requires that information be supplied to the SEC about major individualparticipations in ownership. This information is open to public scrutiny.

   The reports to the SEC are tabulated alphabetically and publishedeach month in the Official Summary of Security Transactions and Holdings,published by the United States Securities and Exchange Commission, All persons canconsult back numbers in any central metropolitan public library or can subscribeto the publication at $1.50 per year.

   Under the Securities and Exchange Act, 1934, all corporate officers,directors, closed-end investment companies and individual nonofficer owners or beneficiariesof 10 per cent or more of any securities issue of any company offering securitiesfor sale in the American market must report each month all purchases, sales or othertransfers of securities in any company in which they have a direct or indirect interest.

   This requirement in some ways provides far more data than didthe TNEC study. For it relates to all security-selling companies, not merelythe 200 largest. And while, unlike the TNEC study, it does not single out the largeststockholders as such, the requirement that stockholders owning 10 per cent or moreof any issue report changes in investment position often discloses the biggest elements.If someone owned only 2 per cent of an issue but was among the twenty largest stockholders,the SEC reports, unlike the TNEC study, would not disclose him unless he was alsoan officer or a director.

   To some extent the 10-per cent requirement partially screensbig wealth, which is held mainly in family phalanxes. For if three buyers or sellerseach held 9.9 per cent of the stock of a big company, amounting to 29.7 per centcontrol, the SEC reports would not show them unless they were officers or directors.The same would be true if ten members of a family each owned 5.5 per cent of thestock, amounting to 55 per cent or absolute control. They could be represented onthe board of directors by nominees, their own lawyers or bankers, who might holdonly a few directors' qualifying shares.

   Not only do the SEC reports show purchases and sales but alsoacquisitions or dispositions by bequest or inheritance, compensation, corporate distribution,exchange or conversion, stock dividends, stock splits, redemptions and gifts. Whilepersonal gifts of stock are strewn throughout the year (apparently in observanceof birthdays), Christmas appears to be a favorite time of the propertied for givingstock. The Christmas gifts are especially reflected in the January and February reportsfor each year.

   What the SEC reports do not tell us about wealth-holdingswould perhaps be a better guide than the statement of what they do contain.

   The SEC reports do not inform us at all about (1) federal, stateand municipal bondholdings (although they do inform us about corporate bondholdingsand about all senior and junior issues); (2) noncorporate real estate, land or mortgageholdings; (3) personal interests in enterprises abroad that do not offer securitiesin the American market; (4) holdings of noncorporate promissory notes, options, cash,foreign exchange, insurance policies and collections of jewels or objets d'art;or (5) miscellaneous personal property, such as Swiss bank accounts, racing stables,foreign islands, yachts, airplanes and cars.

   It is not our intention to determine the exact extent of participationof any fortune in a particular property, although the TNEC study did make such adetermination possible with respect to the largest corporations. Nor is it our intentionto determine the exact investment position of any fortune at any given moment. Sucha determination could only be made by a new government study or by a Permanent NationalEconomic Committee; even the TNEC study did not inquire into stockholdings belowthe top twenty, although a person could be incalculably wealthy if he was the twenty-firstlargest stockholder in many companies. Nor is it our intention to trace shifts inholdings among various companies, although in certain cases such shifts are clearlyshown by SEC data.

   Despite the logical possibility of concealment of a fortunein, say, tax-exempt bonds or jewels, it should be noticed that no big fortune wasever made in such investment media. The modern corporation, plus engineering technique,more recently aided by huge government contracts, is the big and virtually exclusiveinstrument of modern fortune-building, and a fortune once made cannot disappear fromview merely by going into tax-exempts or real estate. One can usually trace it, asin the case of Delphine Dodge, at least up to the point of its conversion into morestatic media.

   Even with the help of the voluminous SEC reports, it is possibleto lose exact trace of some large fortunes although, having no evidence of theirdestruction, one knows they must still exist in some form. Individuals or groupsowning 15 per cent of enterprises scrutinized by the TNEC may have halved their participationand spread the proceeds of sale among various companies. If they do not functionas officers or directors or hold at least 10 per cent of some company, their furthertransactions are not reported by the SEC.

   Lamentable though this may appear, it does not impede us bymuch for most of the large interests stay put. They are more likely to increase theirholdings as J. Paul Getty and the Du Ponts have steadily done to the date of thiswriting, than to reduce them. If they merely retain their holdings, new investmentsare apt to be made with income from the old investments, thus obtaining desirablediversification as a shield against changes of various kinds: technological, political,cultural, economic and social.

Aims of SEC Reports

   The object of the SEC reports was to terminate the rigging ofsecurities markets, prevalent before the passage of their enabling law. Before thelaw was passed, company officers, directors and leading stockholders (while issuingoptimistic or pessimistic reports) would secretly sell or buy the company's stockon the basis of knowledge at variance with the reports. A large public of gulliblesmall stockbuyers was in this way repeatedly stung and tended gradually to lose faithin the riproaring Republic for which an earlier gullible horde had bled and died.

   Under the securities law, insiders cannot long keep to themselvesfavorable or unfavorable turns in a company's outlook. Again, what they say can beevaluated in relation to what they actually do in their own securities.

   Buying and selling by insiders do not invariably indicate somethingabout a company. Insiders, too, have been wrong in their estimates of a company'sposition in the context of public policies and conditions. Sometimes insiders sellsome of their holdings because they need money for taxes, because they see a betteropportunity elsewhere or because they have a fixed policy of taking low-tax capitalgains in companies with low dividend payouts. Usually it means only that they aretaking profits or avoiding losses.

   Some small market operators mechanically follow the buying andselling of insiders, but not with universally fortunate results. Everything elsebeing equal, as it seldom is, it is not a bad policy to pay heed to company officersand directors when they buy or sell heavily. For this reason the SEC monthly reportsare closely studied by market aficionados. But company officers, playing onlyfor swings in the market, often sell as quickly as they buy and the knowledge isonly available a month later-sometimes too late for outsiders.

   One thing the SEC reports show clearly is that in many companiesthe officers and directors repeatedly buy and sell as a block. Presented to the countryas masterful managers of giant enterprises that are the envy of the world, as buildersof the nation indeed, they nevertheless in many cases seem interested in playingthis private poker game which has no economic justification. It does nothing forgross national product. In so doing they show they are basically Pecuniary Men willingto turn their attention to anything that will swell their bankrolls. If they couldgo out on the corner and make money by trading baseball cards or stamps the way childrendo, or lagging pennies, one would find them out on the corner. Their icon is thestock ticker.

   Different companies have different policies about timely fluttersin the securities market by officers and directors. In some cases such transactionsare rare. In many companies it is apparently thought to be one of the perquisitesof officers to trade tip and down in a percentage of their holdings, thus incurringlow capital-gains taxes while getting more income so their wives and children won'tfall behind on country-club dues.

   With such factors in mind the monthly SEC reports on holdingshave been selectively checked with a view to updating the TNEC data, thus reassuringanxious critics that our material is all fresh and new. But, in general, in-and-outtrading by mere company officers and directors has been ignored here except whenit has seemed to be of significant proportions or by significant officers.

   Attention has been concentrated pretty much on the originalTNEC list and the 1964 Fortune list of the largest nonfinancial companies,although there is also presented an extensive listing of control groups in otherwell-known companies.

   As to the method used in examining the SEC reports, which embracethousands of companies and tens of thousands of individuals: The reports have beenclosely scrutinized in their entirety from 1960, inclusive, through 1965. As everytransaction registered requires that the net remaining holding be given, one is assuredof what the latest position is, confirming or not the TNEC finding at a distanceof about twenty-five years. In this way, too, late-coming names of big holders (ifthey buy or sell) are brought into view.

   Where significant large holdings have not turned up in this1960 decade, a special tracing backward by individual companies was made prior to1960 to ascertain the latest date when a net position was given for some family member(thus showing the continued presence of the family).

   In certain companies the holdings were traced back to 1945 orto the point that yielded the latest total holding. Such a complete tracing was madeof all the major Rockefeller, Mellon, Ford, Du Pont and Rosenwald properties; itwas not necessary in the case of others because their presence is fully revealedby the data of the 1960's in almost all cases.

   What may seem to be a defect in this method, and perhaps itis a genuine defect, is that by stopping the retroactive survey with 1960 we won'tpick up any new investments made by either new or old wealth-holders prior to 1960.But the objective here is not to show the entire investment position of either newor old wealth-holders or to trace all these elements from one company to anotherin such cases in which they have transferred investment allegiance. All I am tryingto do is to show who is rich now and who is a big newcomer to riches by presentingsome large samples.

   Nor am I trying to develop in detail the names and holdingsof every one of 90,000 or more millionaires. Limited space makes it necessary toconfine attention to the cream of the crop.

   In the case of some of the new companies, I have examined theoriginal prospectus filed with the SEC, as required by law, to ascertain any significantchanges in holdings and identities. Particular attention was given to the new publicutility operating companies organized out of the old holding companies, because asmatters stood in the earlier chapter we tended to lose sight of the owners in theshuffle. The question is: Are they still there? If not, who has taken their place?

   We are initially armed with the fact that these companies aren'towned by just anybody out of 190 million-odd in the population. Even the most tenuouskind of ownership puts the owner into about 10 per cent of the populace. And anyholding of any kind worth minimally $60,000 net as of 1953 places him within 1.6per cent of the population. The holdings with which we are most concerned are limitedto a circle consisting of 0.11 of 1 per cent of the population.

   Thus narrowed, our attention is focused directly on the biggestAmerican proprietors--the magnates, the big shots.

   The SEC requires that reports of a person's entire interestbe made if there is any change. in any holding in which he has a beneficial interest.This means that his personal holdings, those in which he has an indirect beneficialinterest as from a trust or family holding company, those held by a spouse, thosefor which he acts as trustee or custodian, must all be reported if more than 100shares are bought or sold in any part of the holding, direct or indirect. A goodpicture is therefore given of particular beneficial interests.

   While such reporting is for individuals--except when made bya closed-end or family investment company--the holdings of big financial groups arerevealed through different transactions on behalf of various members of a family.

   It is true that this method will not reveal the holdings ofan entire family group in a particular company unless every member of the group engagesin transactions, as they sometimes do. But we already know the names of the big familygroups so that if we see one member altering his investment position it may be deducedthat the others are still solvent but are merely not interested in buying or selling.

   We cannot tell in every case who is better off or worse off.A family group may have closed out a very large holding and diversified its ownershipin smaller slices in many companies. The new diversified position may have improvedits position or not. In dollar values, owing to the general inflation of prices,probably all positions have been improved. At the very top, among Mellons, Du Pouts,Rockefellers, Rosenwalds, Fords and Pews, we know that relative positions have beenimproved because their companies have outperformed the economy, sometimes by verywide margins. Comparisons can be made here by relating gross sales to gross nationalproduct, gross income to national income and net income to net national income.

   The reports are set down by the SEC in the following generalform:

                    Transaction    Net HoldingJohn Doe            ± X shares      X shares  Trust                X1 do.        X2 do.  Savings fund         X2 do.        X2 do.  Employer's fund      X3 do.        X3 do.  Wife or family       X4 do.        X4 do.  As trustee           X5 do         X5 do.  As custodian         X6 do.        X6 do.  Investment company   X7 do.        X7 do.  Partnership          X8 do.        X8 do.

   The plus-or-minus, indicating a purchase or sale, is creditedin the SEC report to whatever individual or instrumentality did the buying or selling.

   It would require too much space here to report individual byindividual in this way. A somewhat different form of presentation has been adoptedto convey the same information.

   Our findings will be set forth as much as possible in semi-tabularform. Although share totals will be given, they will not be translated into marketvalues. This task may be left as an exercise for the interested reader, who willbe given the 1965 prices for the biggest companies.

   As a foretaste of what we are after let us ask, for example,how do matters stand in the late 1960's with J. Paul Getty? Is he still rich? TheSEC Official Summary, September, 1965, informs us that he personally owned4,610,217 shares of the Getty Oil Company and was an indirect participant in trustswith 7,948,272 shares--a total of 12,558,489 shares or about 80 per cent. At a priceof 34-7/8 for Getty Oil on November 22, 1965, this holding had a market value ofnearly $438 million; in late 1967, $1.2 billion.

   This figure by no means represents everything owned by Getty,who is interested directly and indirectly in many other companies, but it does satisfyus that he is still very rich, probably worth more than a billion. And that is allwe are concerned with. For many years, he and his companies have been steadily addingto their holdings. The SEC report for July, 1965, showed Getty Oil owned 4,077,240shares of Mission Development, a different company. The report for December, 1963,showed that Getty Oil, after buying 21,169 shares, owned 2,748,883 shares or 63 percent of Tidewater Oil Company, in which J. Paul Getty through a trust fund ownednow only 4,225 shares. He owned none directly, having exchanged his earlier Tidewaterstock for Getty Oil stock. The report for June, 1964, showed that Mission Corporationin turn, after buying 8,500 shares, owned 3,431,280 shares of Skelly Oil Company.These are all majority ownerships.

   We could go on in this way analyzing the multifarious holdingsand interholdings of J. Paul Getty but we would never get to the bottom of it inany event. For Getty, like many others, is a big foreign operator and unquestionablydoes not have all his holdings registered on the American record.

   Getty is clearly officially certified as still in possessionof vast wealth. But we must continue, as there may be gnawing doubts about others,such as Rockefellers and Pews, Pitcairns, Do Ponts, McCormicks and Rosenwalds, Clarksand Dukes. 1

   In requiring reports of a beneficial interest in trust fundsand of holdings as a trustee, the law reveals a large portion of the social securitysystem of the rich. It is an excellent system, and provides much security for itsbeneficiaries. But in considering it, one wonders about the oft-heard thesis of manyconservative and ultra-conservative spokesmen and newspapers that the federal SocialSecurity System, the Family Welfare System and the trade-union system all carry greatdanger of destroying the characters of the participants. They might, among otherthings, become mercenary or lazy.

   The rich themselves very evidently do not believe that beingthe beneficiaries of huge trust funds has undermined their characters, or that establishingtrust funds for their children will distort the children's characters. No case hascome to light where the children of the wealthy have been left penniless for theirown benefit. All known cases of disinheritance are punitive, because the childrenhave displeased the parents. Why, if drawing benefits without labor from a big trustfund does not destroy character, will drawing benefits in old age from Social Securityor a pension system do so? Why would a true Welfare State be injurious to the generalpublic when a private welfare system of trust funds is not apparently injurious toits limited number of beneficiary heirs?

The Du Ponts Today

   As it is never wrong to begin with the Du Ponts in any discussionof American wealth, let us begin with this fabulous clan, leveling our fundamentalquestion: Where are they now, financially speaking? The evidence strongly suggeststhat they are still massively concentrated in Christiana Securities Company, E. I.du Pont de Nemours and Company, General Motors, Remington Arms and other enterprisesof the kind they were partial to in the 1930's. They stand approximately where theywere shown to be in the TNEC study. They have neither gone elsewhere, suffered diminution,become bored with property ownership nor disappeared. Taxes have not exterminatedthem or even visibly shaken them.

   Some revelatory SEC reports by members of the Du Pont familyin the 1960's are, incompletely, as follows (dates refer to monthly issues of theOfficial Summary of Security Transactions and Holdings):

Christiana Securities Company     Price range 1965: $232-$315                                        Shares        Date ReportedIrenée du Pont, Jr                      150,460       March, 1965   Trust                                 22,322A. Felix du Pont, Jr.                    20,510   Trust                                 92,132L. du Pont Copeland                     252,657       August, 1964   Trust                                    100Crawford H. Greenewalt                   52,848   Trust                                  4,410S. Hallock du Pont                      140,000       March, 1964William Winder Laird                     88,546       August, 1963R. R. M. Carpenter, Jr.                  11,520       February, 1963   Trusts                               130,995Pierre S. du Pont                        29,472       October, 1961Lammot du Pont Copeland,   through Delaware Realty   and Investment, merged   with Christiana                       52,299*   *Shares of Delaware Realty and Investment

These holdings vary from year to year. Some of the Du Ponts are, from time totime, fairly active traders in a marginal percentage of their holdings. And whilethey do not reflect the entire holding of the Du Pont family in Christiana Securities,for which the TNEC study showed the family owning 73.958 per cent of common and 58.541of preferred prior to its absorption of Delaware Realty (of which the family owned83.985 per cent), what these deals since 1960 do positively show is that the Du Pontfamily is today still ensconced where it was found to be by the TNEC inquiry. 2

   As for E. I. du Pont de Nemours and Company, the world's largestchemical company, the SEC reports show the following incomplete recent holdings:

E. I. du Pont de Nemours Price range 1965: $225-1/4--$261                               Shares         Date ReportedChristiana Securities     13,416,120         February, 1965Crawford H. Greenewalt        11,710   Co-trustee                  4,000L. du Pont Copeland           69,297         November, 1963   Andelot, Inc.              40,668   Trust                      86,072Irenée du Pont, Jr.,           7,562         August, 1963   Trusts                     20,000Pierre S. du Pont              2,926         March, 1963William du Pont, Jr.,          8,000         February, 1963   Trusts                  1,261,888Irenée du Pont, Jr., Trust   143,864         September, 1962Henry B. du Pont              12,407         September, 1961Emile F. du Pont               8,766         March, 1961

   These are by no means the only transaction dates for Du Pontsin stock of Christiana Securities and E. I. du Pont de Nemours in the early 1960's.They merely represent some of the latest positions.

   A more thorough disclosure of the identities of some leadingDu Pont stockholders was made in the Monthly Summary for June 11, 1949, onthe occasion of a stock split in E. I. du Pont de Nemours. Then the holdings of DuPonts who were officers and directors and holders of more than 10 per cent were asfollows:

                                                 Common SharesDonaldson Brown, married to   Greta du Pont Barksdale   Broseco Corp. (Brown Securities Corporation)     20,000J. Thompson Brown                                   49,096W. S. Carpenter, Jr                                 47,256Christiana Securities                           12,199,200Lammot Copeland                                    110,680   Trust                                            92,572Delaware Realty & Investment                     1,217,920Emile F. du Pont                                     2,248   Wife                                                180Eugene du Pont                                     203,212Henry B. du Pont                                    10,844Henry F. du Pont                                   173,000Irenée du Pont                                      12,000Lammot du Pont                                      63,836P. S. du Pont III                                    6,940Pierre S. du Pont                                   32,896C. H. Greenewalt                                     4,236                                            $4.50 series preferred                                                     sharesLammot Copeland through   Delaware Realty                                  16,256   Emile F. du Pont                                     15   Eugene du Pont                                    6,405Henry B. du Pont through   Delaware Realty                                  16,256Henry F. du Pont                                    14,184P. S. du Pont III                                       11Pierre S. du Pont                                       34   Trust                                             1,611

   The way titles stood at the end of 1965 was as follows: Membersof the Du Pont family own more than 75 per cent of Christiana Securities, which inturn owns at least 29 per cent of the stock of E. I. du Pont de Nemours. IndividualDu Ponts separately own additional E. I. du Pont stock or are beneficiaries of trustfunds, so that the entire family holding exceeds 44 per cent in gigantic E. I. duPont de Nemours.

   E. I. du Pont de Nemours itself, until recently, owned 23 percent of the stock of General Motors Corporation, saleswise the world's largest industrialcompany. After it and other Du Pont holding companies and trust funds were orderedby a federal court to distribute this stock to individual equity owners, each ownerof each share of E. I. du Pont de Nemours received 1.36 shares of General Motors.Upon receiving their share of the GM distribution, Christiana Securities and otherDu Pont family funds (selling some to pay capital gains taxes.) passed the GM sharesthey received on to individual Du Ponts.

   The question now is: How much General Motors stock remains inthe hands of individual Du Ponts? Assuming that they sold none since the court ordertook effect in 1962, on the face of it they still hold at least 17.25 per cent ofGeneral Motors outstanding stock. This minimal figure is arrived at by assuming thepayment of a 25 per cent capital gains tax on the entire holding in GM, an overgenerousassumption because the holding was not all interpreted as capital gains.

   However, the Du Pont company management announced that, goingbeyond the court order, members of the family closely associated with the Du Pontcompany management would voluntarily dispose of their General Motors stock, but suchsale would hardly bring holdings below 17.25 per cent because no tax at all was requiredon the GM shares distributed to individuals by E. I. du Pont de Nemours.

   The SEC reports do not show holdings for Du Ponts in other companieswhere they are not officers, do not own more than 10 per cent individually, or havenot engaged in stock transactions. But that they are interested personally in othercompanies is shown by the September, 1965, Official Summary where Henry B.du Pont is reported holding 6,000 shares in Remington Arms after selling 500 shares.E. I. du Pont de Nemours owns 60 per cent of Remington common and 99.6 per cent ofthe preferred. Transactions were not traced for this study in companies like U.S.Rubber and Phillips Petroleum, where Du Pont interests are represented on the boardsof directors.

   But in Remington Arms another big old-line family holding wasshown in the December, 1961, report for M. Hartley Dodge, son of the founder, whowas reported as retaining 510,787 shares after selling 9,072 shares to other membersof his family. Mr. Dodge, son-in-law of William Rockefeller, held 50,000 additionalRemington Arms shares through a holding company and 28,407 shares in a trust fund.(The SEC reports provide similar information on the other old-line wealthy families:Phipps, Clark, Danforth, Knudsen, Baker, Anderson-Clayton, Dollar, Fisher, Heinz,Swift, Prince, Pew, Harriman, Block, Ryerson, Pitcairn, Hanna, Levis, Warburg, Kresge,Timken, Armour, Grace, Bedford, Firestone, Rosenwald, Colgate, Peet, Milbank, Crocker,Jennings, Olmsted, Cudahy, Havemever, Cabot, Lehman, Woolworth, Gimbel, Jones-Laughlin,Candler, Rosengarten, Hochschild, Wrigley, Rosenstiel, Reynolds, and others.)

   With very few exceptions, and a few additions, the roll thatwas called in the formidable TNEC study is echoed and reechoed today in the SEC monthlyreports.

   What has been proved in these foregoing pages? Not very much,one would be forced to agree: Merely that the Du Ponts are still alive and thrivingand are richer and more powerful today than they were in 1940. And one can predictthat they will continue to grow richer and more powerful as long as the continuallyamended New Deal, Square Deal, New Frontier and Great Society politico-economic synthesisprevails.

The Ford Family

   There isn't much doubt about the financial endurance of theFord family, because the holdings of Henry and Edsel Ford were transferred only after1947 to the present heirs. Those who believe they may be suffering extinction underthe impact of metaphorically brutal taxes or other forces may gain reassurance fromrecent records.

   The Fords did not turn up in the SEC reports until September,1956, when it was shown that Benson Ford held 1,025,915 shares of Ford Motor ClassB stock and Henry Ford II held 1,055,346 of the Class B. The Class B stock, all ofwhich went to the Fords, holds 40 per cent of the voting power. The way this ClassB holding came to the SEC record was explained as follows: "Reported that bythe terms of a trust created by a relative, Benson Ford and Henry Ford II had incommon with two others an option expiring 6/26/56 to acquire 15000 shares of ClassB stock. Benson Ford, on 6/20/56, by gift, delivered an assignment of his portion(3750 shares) of the option. On 6/26/56 Henry Ford II, for a consideration, deliveredan assignment of his portion (3750 shares) of the option."

   In the February, 1957, Official Summary it was reportedthat Henry Ford II disposed of 9,000 shares of Class B and in September, 1957, itwas shown that he disposed of 100,000 shares and acquired 100,000 shares of the common.The March, 1959, report showed him disposing of 19,415 Class B shares in a privatesale and that he had established a holding company that owned 3,284 shares; he retained815,901 Class B shares at this point. By September, 1959, he had reduced his commonholdings to 90,500 shares.

   As of September, 1964, Henry Ford II no longer held any commonin his own name but did hold 43,846 shares through a trust.

   In March, 1964, it was reported that he now owned 1,319,576Class B shares, held 75,000 B shares in trust, 12,000 B shares through holding companiesand was trustee for 316,398 B shares. He now held 99,846 common -shares in a trust.

   In January, 1962, it was reported that Benson Ford had reducedhis direct holdings of the Class B to 894,147 shares but indirectly held 5,987 inholding companies and 105,456 in trust.

   These are the latest positions through 1965 shown for the twomen. No positions are shown for William or Charlotte Ford, which presumably wereoriginally identical.

   As reported earlier in this account, the Ford family effectivelycontrols the Ford Motor Company and would continue to control it even if a considerableamount of additional common stock were given voting power through sale by the FordFoundation.

The Mellon Family

   The SEC report of March, 1965, showed Richard King Mellon clearingout his last 100 shares of Aluminum Company of America $3.75 cumulative preferredstock, leaving his holdings in this issue at zero. In July, 1963, however, he wasshown as holding 861,200 common shares of Alcoa ($61-1/2-$79-5/8) ) after disposingof 291,552 shares. Alcoa is the world's largest aluminum producer. And in June, 1963,he retained 2,809,922 shares of Gulf Oil ($87-$94-1/4) ) after disposing of 1,943,580.But in July, 1961, he held 4,666,929 shares of Gulf after selling 400,000 shares.

   On the basis of the above facts one might reasonably concludethat the Mellons were still flourishing, without taking into account their othermanifestations in the form of directorships and the like.

   But a more positive showing can be made. In December, 1945,according to SEC reports, some years before six-for-one stock splits, Richard KingMellon owned 1,070,637 shares of Gulf Oil, and his sister, Sarah Mellon Scaife (whodied late in 1965) owned 1,041,144 shares. Donaldson Brown of General Motors andDu Pont intermarriage owned 100 shares of Gulf Oil in July, 1947, and held 93,400through the Broseco Corporation. Alan M. Scaife owned 9,300 shares of Gulf Oil, accordingto the January 10, 1949, SEC report, and by January, 1950, had raised his holdingto 10,300 shares. He owned 30,600 shares in June, 1951.

   Down through the years various other transactions in Gulf Oiland Alcoa are shown for this branch of the Mellon family but there is no presentpoint in tracing them; the Mellons are, obviously, still in the ascendant.

   The SEC reports show no transactions since 1945 in Gulf Oilor Alcoa for Paul or Ailsa Mellon or transactions for either of these two Mellonsin the securities of any companies since 1960. Paul Mellon has been less active thanhis older cousin in corporate affairs, has more particularly applied himself to foundationand cultural affairs.

   The TNEC study found that this clan had a finger in some hundredcompanies. Even if one had records of recent transactions in them all it would beawkward to set them forth. Exposition is defeated by the very extent of holdings.Recent SEC reports show, for example, that the Consolidation Coal Company, formerlythe Pittsburgh Coal Company, of which Richard, Paul, Sarah and Ailsa Mellon ownedmore than 50 per cent (according to the TNEC study), now holds a 7 per cent interestin the Chrysler Corporation. To trace all such ramifications would be a virtuallyendless task.

   Nor can we undertake to scrutinize all overlappings of largeinterests. The M. A. Hanna Company is a very large stockholder in Consolidation Coal,the SEC reports, and has heavy investments in many other large companies. H. BarksdaleBrown, of the Du Pont clan, owns 3,317 shares of Gulf Oil (SEC, May, 1965); and theBroseco Corporation, instrument of the Brown family, held 666,684 shares on thatdate. We have already seen that Donaldson Brown, former high General Motors executive,and the Broseco Corporation are heavy stockholders in E. I. du Pont de Nemours. DonaldsonBrown and the Broseco Corporation are also substantial stockholders in General Motors(SEC, October, 1950). Down through the years there has been much talk, much of ituninformed, about interlocking directorships. It is more significant that there isa great deal of interlocking ownership among the big interests.

The Pew Family

   The TNEC study found the Pew family of Philadelphia in firmownershipcontrol of the huge Sun Oil Company ($56-5/8-$67-3/4). Recent SEC reportsconfirm that the family is still in charge with a large dominant interest, 41.5 percent. John G. Pew recently held 44,139 shares (September, 1965). Arthur E. Pew, Jr.,held 37,170 shares and a John G. Pew trust 217 shares (December, 1964). Walter C.Pew held 434,214 shares (November, 1964). J. Howard Pew held 794,416 shares (April,1964). A trust for A. E. Pew, Jr., held 32,207 shares (November, 1963). J. N. Pew,Jr., held 647,335 shares (November, 1960). And so on. Whatever the precise Pew ownershipposition is at any given time, one is obliged to conclude that the Pews are stillin full charge of the Sun Oil Company.

The Pitcairn Family

   This Pennsylvania family, shown by the TNEC study to dominatethe giant Pittsburgh Plate Glass Company ($67-1/4-$85), in the SEC report for August,1965, was shown to still hold 3,121,296 shares (about 30 per cent) through the PitcairnCompany, the family holding company. Nathan Pitcairn, according to SEC reports (August,1963) owned 2,912 shares of the Pittston Company ($23-1/8-$32-3/8), big coal, oiland transportation holding company; and the Pitcairn Company held 42,000 shares ofPittston, Whatever else they own the available record showeth not.

The Rockefeller Family

   The SEC reports fail to show any dealings in any of the StandardOil Company stocks by the six leading Rockefellers since 1940. This lacuna is perhapsto be expected, as none of them is a director in the Standard Oil cluster and apparentlynone individually owns as much as 10 per cent of any Standard Oil stock. As far asthe SEC reports show, the Rockefeller position in the Standard Oil group has remainedbasically unchanged since the time of the TNEC study, although there could have beensales or purchases without their being reflected in the SEC reports. There were indeedsales of Socony in the early 1950's by the late John D. Rockefeller, Jr.

   The SEC report for July 10, 1947, showed the Rockefeller Foundationholding 345,902 shares of Standard Oil of Ohio after selling 6,782 shares. VariousSEC reports show recent holdings for old-line Standard Oil families such as the Jenningsand Bedfords.

   But a few dealings in stocks of non-Standard Oil companies ofwhich they are directors are shown in the reports for David and Laurance Rockefeller,suggesting that they still command ample resources. Whether they have sold out anyStandard Oil holdings in order to participate in other companies the record doesnot show, but there is no reason to suppose they have. Apart from their foundationtrusteeships the Rockefeller brothers, with the exception of New York Governor NelsonA. Rockefeller, are currently all directors of Rockefeller Center, Inc., and RockefellerBrothers, Inc.

   David Rockefeller is chairman of the Chase Manhattan Bank, secondlargest in the country, and is known to hold stock in companies in which he holdsdirectorships. The SEC, November, 1962, showed that he held 8,950 shares of B. F.Goodrich stock through trusts. As of 1965 he was a director of Goodrich, RockefellerBrothers, Inc., Equitable Life Assurance Society; and chairman of Morningside Heights,Inc., a real estate development.

   Laurance S. Rockefeller is often described as a "venturecapitalist" and, in addition to his foundation trusteeships, was in 1965 chairmanof Rockefeller Brothers, Inc., Cancel Bay Plantation, Inc., Rockefeller Center, Inc.;director of Filatures et Tissages Africains; chairman of Estate Good Hope and ofthe Dorado Beach Hotel Corporation. The SEC reports, September, 1961, show that heheld 183,274 shares, more than 15 per cent, of the Marquardt Corporation ($8-3/4-$19-1/2) after selling 1,300 shares. In Itek Corporation he sold 425 shares as reportedby SEC in July, 1965, retaining 152,080 shares ($41). His investment orientationis said to be toward growth enterprises.

   Winthrop Rockefeller, a self-described investment manager, hasestablished himself in Arkansas as an extensive operator in land and large-scaleagricultural projects. He is a director of the Union National Bank of Little Rock.The most martial of the Rockefellers, he entered the army as a private in 1941 andemerged as a lieutenant colonel; he was with the 77th infantry in the invasion ofGuam, Leyte and Okinawa and was decorated with the Bronze Star with oak leaf clusterand the Purple Heart.

   If one were to base one's conclusions about the financial statusof the Rockefellers from the SEC reports alone, there would be little to tell. Astranger to the scene, with only the SEC reports to go on, would never conclude theRockefellers amounted to much financially. But we do know from court records thatthe extensive Standard Oil holdings of John D. I passed to his children, chieflyto John D. II, whose will in turn indicated that he had established trust funds forhis six children and many grandchildren. We are thrown back in this case to the TNECstudy for basic data.

   The family could have divested itself of Standard Oil holdingsbut, if it had, the fact would have become known through SEC reports or other channelsThe Rockefellers do not actively associate themselves with the management of theStandard Oil enterprises, apparently allowing them to be run according to standardbig-business practices; but the general opinion of investment specialists is thatdirectly and indirectly they hold a decisive veto power over any policy or actionof these companies. No conceivable financial syndicate in the world would undertaketo challenge the unobtrusive Rockefeller dominance of Standard Oil Company (New Jersey),the largest oil company and the largest industrial enterprise by assets of any kindin the world.

   My conclusion is that the relative financial position of theRockefeller family is now the same as or better than it was at the time of the TNECstudy. It may be surpassed a bit by the far more numerous Du Ponts; but no singleDu Pont appears to be as wealthy as any one of the six oldest Rockefellers. The financialstrength of the Du Ponts is spread unevenly among some 250 persons. So, while thecollective net worth of the Du Ponts may or may not be somewhat greater than thatof the Rockefellers, only the Mellons can compare with the latter individually.

   The general strength of the Rockefellers and Mellons, net worthto one side, also appears notably great because it is more widely diversified inhigh priority enterprises--especially banking. The Du Ponts seem more deeply entrenchedin frontier technology, although neither the Standard Oil companies nor Gulf Oilshould be overlooked as huge science-oriented enterprises. They are more than producersand distributors of petroleum.

   But the very vagueness of our recent specific data onthe Rockefellers, their failure to trade in and out of their stocks, should in itselfbe taken as a sign that they preside over enterprises too vast to permit distractioninto minor operations.

The Rosenwald Family

   About 25 per cent of the stock of Sears, Roebuck and Company,largest merchandising enterprise in the world, is owned by the employees' pensionfund. The TNEC report showed the Rosenwald family holding 12.5 per cent Of the stock,worth now about $500 million. While the Rosenwalds do not engage. in many stock transactionsin this company, there have been a few, enough to signal that they are still present.Whether their percentage holding is now greater or less than it was there is no wayof determining through the SEC reports. In view of the vast expansion of the companysince the war, one would surmise that they had simultaneously added, net, to theirholdings The most recent Rosenwald holding was shown in the SEC report for October,1964, when Edgar B. (Rosenwald) Stern, Jr., was shown as owning 25,017 shares directly,1,762 shares as community property and 312,844 shares through a trust fund. He isa director of the company and an occasional trader in the stock. The July 11, 1949,SEC report showed that Julius Rosenwald II held 7,248 shares after selling 750 shares.As neither of these are the major living Rosenwalds, who are Lessing and William,we may safely conclude that the family still maintains a large financial presencein the company, with the management of which they have always been actively associated.

Miscellaneous Large Holdings

   Similar large holdings by family and investment groups in majorcompanies can be set forth. In order to economize on space there will now be summarilyreported, on the basis of the SEC reports, some concentrated large stockholdingsin the largest companies of 1964, mostly of old-line families. The dates are of theSEC monthly reports. Prices are the 1965 range.

   Some such holdings are, incompletely, as follows:

                                          Shares       DateArmour               ($35-1/4--$53-1/8)   Frederick Henry Prince Trust of 1932   356,000      Sept., 1965   Modestus R. Bauer                      136,400      March, 1965   William Wood Prince                     63,625      Jan., 1965Reynolds Metals      ($33-5/8--$48)   David P. Reynolds                      175,090      Jan., 1965      Trusts                              180,264      Minor daughters                      4,7 20      Davreyn Corp.   R. S. Reynolds, Jr.                     64,075      Trusts                              252,256      As custodian                            323      Rireyn Corp.                         42,472   William G. Reynolds                    108,486      Trusts                              84,87 8      Wilreyn Corp.                      240,5 77Singer               ($56--$83-1/)4   Stephen C. Clark, Jr,                   113,432      Sept., 1965      Trusts                               193,872   F. Ambrose Clark                        259,264      Jan., 1964      Trusts                               650,110American Sugar        ($19-3/8--$31-5/8)   Frederick E. Ossorio                     51,325      Sept., 1965      Ossorio family                        35,759      As custodian                          21,896Inland Steel          ($41-3/8--$48)   L. B. Block                              61,500      Aug., 1965      Trusts                               123,900   Joseph L. Block                          51,563      May, 1965      Trusts                               123,900   Phillip D. Block, Jr                    143,694      Feb., 1960      Trusts                                19,500Alleghany             ($8-3/4--$13-3/4)   Allan P. Kirby (Woolworth)            3,451,913      Dec., 1963      Holding company A                    632,900      Holding company B                      9,400Scott Paper           ($33-$40-1/8)   Thomas B. McCabe                        865,752      Nov., 1963Minnesota Mining & Mfg.   ($540-$71-5/8)   Ralph H. Dwan                             1,000      Aug., 1965      Trust                                876,000      Trust                                371,800   John D. Ordway                            4,500      Aug., 1964      Foundation                             1,500      Ordway Trust                       4,682,504   William L. McKnight                   2,711,801      May, 1963   Archibald G. Bush                     1,797,895      May, 1961      General Guarantee Insurance           25,000Owens-Illinois        ($49-5/8--67-1/4)   Robert H. Levis II                       12,980      July, 1965      R. G. Levis Estate                     4,200      Trust                                 60,000   J. Preston Levis                         25,450      Aug., 1964      Trust                                  2,000   William E. Levis                         53,592      July, 1960      Partnership                            8,000Polaroid               ($44-1/4--$130)   Edwin H. Land                         1,313,520      July, 1965   James P. Warburg      Holding company                       36,885      Bydale Company                      169,7176      Fontenoy Corporation                   1,216        (Both of these holdings are         reduced from originals)International Business Machines    ($404-$549)   Arthur K. Watson                          56,111      May, 1965      Trusts                                 34,315   Thomas J. Watson, Jr.                     37,072      Trusts                                 34,315   Sherman M. Fairchild                     164,795      Magellan Company                        3,750Dow Chemical           ($65-1/8--$ 83-3/4)   Herbert H. Dow                           272,832      March, 1965Corning Glass Works     ($49-1/8--$58-3/4)   Amory Houghton                            51,350      Feb., 1963      Trusts                                918,651   Amory Houghton, Jr                           400      Oct., 1961      Trusts                                 22,500      As Trustee                              1,130   Arthur A. Houghton, Jr.                  265,465      Trusts                                990,401International Paper     ($281/4--$36-1/8)   Ogden Phipps                               1,513      March, 1965      Trust                                  14,599      Holding company                       909,226W. R. Grace             ($47-1/4--$61-3/8)   J. Peter Grace                           240,678      March, 1965      Trusts                                 50,715   Michael Phipps                             8,641      Dec., 1963      Holding company No. 1                 370,897      Holding company No. 2                   9,146John H. Phipps                               10,028      July, 1962      Trust                                     752      Holding companies                     372,590Weyerhaeuser           ($41-1/2--$49-3/8)   C. D. Weyerhaeuser                       117,069      Feb., 1965      Trust                                 165,963      Corporation                             1,422   John H. Hauberg                           15,658      Dec., 1964      As guardian                             7,050      Trusts                                170,732      Corporations                           13,500      Nonprofit corporation                   2,125   Herbert M. Kieckbefer                    298,278   John M. Musser                            76,356      April, 1964      Trusts                                162,800      As trustee                            110,257   F. K. Weyerhaeuser                       142,646      Jan., 1964      Trusts for children                    64,000      Green Valley Co.                       35,360Winn-Dixie Stores      ($35-1/8--$43-7/8)   Four members of Davis family           2,714,897      Feb., 1965Anderson, Clayton      ($26-1/8--$33-1/2)   S. M. McAshan, Jr.                         55,326      Jan., 1965      S. C. McAshan Trust                    129,838   William L. Clayton                        111,652      Oct., 1964   Leland Anderson                            31,103      Dec., 1962Hunt Foods & Industries     ($24-3/4--$33-7/8)   Donald E. Simon                            236,921      Jan., 1965      Trusts for children                       3,422   Frederick R. Weisman                        11,025      Nov., 1964      Lerand                                   80,293   Robert Ellis Simon                         260,649      Aug., 1964Georgia-Pacific       ($51-5/8--$65-5/8)   Julian N. Cheatham                          61,086      Dec., 1964      J. N. Cheatham Corp.                     21,173   Owen R. Cheatham                           217,189   R. B. Pamplin                               22,329     R. B. Pamplin Corp.                       22,943     Trusts                                    31,300   Robert E. Floweree, Jr.                     37,644      March, 1965H. J. Heinz         ($33-5/8--$49-3/8)   H. J. Heinz II                             405,839      Sept., 1963      C. Z. Heinz Trust                       577,728Distillers Corporation--Seagrams     ($30-3/8--$39-1/8)   S. Bronfman Trusts                       3,382,026      Aug., 1963Rohm & Haas           ($151-1/2--$181-1/2)   F. Otto Haas                                13,936      Jan., 1965      Trustee                                  23,707   John C. Haas                                20,446      As trustee                               23,708      Trusts                                  638,702      Charitable trusts                       644,767        (Also see Feb., 1963, for          larger holdings)William Wrigley, Jr.       ($92-1/4--$104-3/4)   Philip K. Wrigley                          364,256      Dec., 1964      Trusts                                   60,845      Corporation                              15,000Firestone Tire & Rubber      ($40-7/8--$50-1/4)   Roger S. Firestone                         267,452      Nov., 1964   H. S. Firestone, Jr.   SPLIT 6 FOR 1        27,346      April, 1947   Raymond C. Firestone   SPLIT 6 FOR 1        35,914   Roger S. Firestone     SPLIT 6 FOR 1        28,390Upjohn                ($52-1/4--$77)   Dorothy U. Dalton                          465,299      June, 1964   Rudolph A. Light                           247,587      Trusts                                   72,331   Preston S. Parish                           16,083      April, 1964      Trusts                                  242,152   E. Gifford Upjohn                           44,617      Trusts                                   50,649   Donald S. Gilmore                          188,750      Jan., 1964      Trusts                                  211,065Consolidation Coal       ($46-3/8--$66-3/8)   M. A. Hanna Co.                          2,010,000      April, 1964National Steel           ($51--$65-3/4)   M. A. Hanna Co.                         3,402, 780      April, 1964Columbia Broadcasting    ($33-5/8--$47-7/8)   William S. Paley                         1,391,968      March, 1964      Holding company                         297,430      As trustee                                9,178Olin Mathieson Chemical    ($41--$58-1/4)   Spencer T. Olin                             28,984      Feb., 1964      In voting trust                         380,930Ralston Purina          $34-7/8--$41-1/2)   Donald Danforth, Jr.                        40,304      Jan., 1964      As custodian                             61,346Crown-Zellerbach       ($47--$60-1/4)   J. D. Zellerbach                           104,462      July, 1963Texas Eastern Transmission      ($44-1/2--$53-3/4)   George R. Brown (Brown & Root)                   0      June, 1963      Partnership                             747,066      Foundation                               16,850      Trusts                                   16,528      Brown Engineering                        19,232   John F. Lynch                              249,566      Jan., 1963Fairchild Camera      ($27-1/4-$165-1/4)   Sherman M. Fairchild                       457,396      Feb., 1963      Partnership                              35,000      Holding Company                          22,000Smith Kline & French Laboratories     ($70-1/4--$86-3/4)   Miles Valentine                                856      Dec., 1962      Trust A                                  42,570      Trust B                               2,116,000Allied Chemical        ($46-1/8--$58-1/4)   William A. Burden                           94,485      Sept., 1962      Trust                                    80,661      Company                                 136,135Merck               ($48-1/2--$75)   Adolph G. Rosengarten, Jr.  SPLIT 3 FOR 1   33,110      Sept., 1961      Estate A                 SPLIT 3 FOR 1   60,600      Estate B                 SPLIT 3 FOR 1   43,000Sehenley Industries      ($22-1/4-$39-7/8)   Lewis S. Rosenstiel                        636,958      Sept., 1961      Wholly owned company                     66,183      Trust A                                   1,500      Trust B                                 217,859American Metal Climax      ($40-3/4--$54-1/4)   Harold Hochschild                          510,558      Aug., 1961

Concentrated Control in All Companies

   Having shown the persistence into the present of these verylarge interests, it will now be demonstrated that virtually all companies--large,medium and small--are ultimately controlled and/or mainly owned by a few large interestsmanifested mainly as families.

   One could show this by direct citation of the SEC reports, whichwould necessitate literally thousands of references. But these SEC reports are utilizedby investment analysis services in reporting to their pecuniary-minded readers. Theseservices summarize the SEC reports of large holdings. We may therefore refer to ahighly reliable secondary source which picks lip and summarizes these facts, a sourceavailable in major public and university libraries. It is The Value Line InvestmentSurvey, published by Arnold Bernard and Company of New York. This Survey,devoted to analyzing investment properties, keeps a large number of well-known listedcompanies under a thirteen-week cyclical survey each year. The facts about to belisted were taken from the summaries of this Survey, which were compiled fromthe SEC monthly Official Summary.

   The contention to which we are addressing ourselves, once again,is this: American companies are widely owned by at least twenty million stockholders,a number that is increasing. While this is true, because anyone owning a single shareof stock worth $5 is a stockholder, we have already seen that most people do notown any stock at all. The thesis that stock ownership is widespread and the furtherthesis that most stock owners hold a great deal of stock is false. Only a very fewpeople own stock in significant quantities. Just how few is shown by the cited Universityof Michigan studies.

   In certain companies, it is true, stock ownership is widespreadcompared with most companies, and much of the stock is held in small quantities.But the fact that a person holds a small quantity of stock in a company like AT&T--100to 500 shares--does not prove he is a small stockholder. He may and often does holdstock in many companies.

   Although a company like AT&T does indeed have many smallstockholders--persons owning 50 to 100 shares and perhaps little or no other stock--thecarefully nurtured propaganda even about AT&T is grossly misleading. This propagandaasserts that no individual owns as much as 1 per cent of the stock of AT&T.

   Now, if any person owned only 1/2 of 1 per cent of the stockin AT&T he would be enormously wealthy, worth about $160 million, but AT&Thas large stockholders whose exact percentage of holdings today would be disclosedonly by a government investigation addressing itself to this question. The UnitedKingdom government, for example, was until recently a very large stockholder in AT&Tas well as in other American and European companies. European governments are largestockholders in many American and European companies. Additionally, private investmentholding companies and family trust funds are large holders. The stockholdings interesteven in AT&T, then, is not so completely generalized as one might conclude uponbeing informed that no individual owns as much as 1 per cent of its stock.

   But if only ten individuals held 1/2 of 1 per cent each, thatwould be 5 per cent of the stock, worth about $1.6 billion, and a long step towardworking control.

   In presenting the following list of dominant interests in awide variety of companies it should be noticed that the big stockholders are usuallycharacterized as a family or group of officers and directors. This is done to savespace; anyone can look up officers and directors in standard reference manuals ifhe is interested in identities. Scores of companies reported in The Value LineInvestment Survey are not listed. In general, those are not listed in which nolarge interest is reported.

   But just because large interests do not trade in a stock andbecause directors own only a few shares there is no reason to believe that largeinterests are not in the immediate background. In the General Electric Company, world'slargest manufacturer of electrical appliances, directors own only 1 per cent of thestock and the SEC reports do not show any single stockholder or family group holdingmore than 10 per cent of the stock. Nevertheless, stockholdings in General Electricare quite concentrated.

   The TNEC study, for example, as of November 24, 1939, showedthat 86.2 per cent of the stockholders, owning 19.4 per cent of the stock, held fewerthan 100 shares each. But 13.8 per cent of the stockholders, owning 80.6 per centof the stock, held in blocks of more than 100 shares each. 3

   Actually, out of 209,732 stockholders at the time, 522, or .2per cent of all stockholders, held 33 per cent of outstanding General Electric stock,while 1.5 per cent of all stockholders held 53 per cent of the stock. 4At that time in E. I. du Pont de Nemours, known by current SEC data to be still closelyheld by the du Pont family, 0.4 per cent of stockholders held 65.7 per cent of allstock. 5 There is not much difference, then, between a company closelyowned and one supposed to be widely owned.

   At that same prewar period the TNEC study showed that in AT&T,0.02 per cent of stockholders held 7.8 per cent of the stock, 0.1 per cent of thestockholders held 15.3 per cent of stock and 0.4 per cent of the stockholders held21.2 per cent of the stock (these figures being cumulative). 6

   In a large company only 5 per cent of the stock, particularlyif it is voted by the management, is generally considered to be a long step towardworking control, and 15 per cent is said to be well-grounded working control. Onlya powerful syndicate contending for the support of medium and small stockholderscan hope to challenge the control of a 15-per-cent block in a big company. Naturally,the closer the controlling block approaches 51 per cent of the stock the nearer itis to absolute control. But working control is ordinarily sufficient for runningthe company and determining its policies.

   AT&T in 1965 had 2,674,000 stockholders. If we assume thereis now the same distribution of large stockholders its before World War II, then534 stockholders now vote 7.8 per cent of the stock, 2,674 vote 15.3 per cent and10,679 vote 21.2 per cent of the stock. Thus is refuted the contention that in thismost widely owned of American companies there is no power-center of concentratedownership. And if these percentages do not now actually prevail, some closely similarset of percentages surely holds and it may well be that relatively fewer stock-holdersown larger percentages of the stock now than in 1939.

   The management of AT&T, far from representing a generalizedwide interest in its stock, in fact acts at the behest of a small group of largestockholders and trust fund managers. The directors themselves hold less than 0.1per cent of the stock.

   By consulting this same TNEC source anyone can ascertain thatin every large American company, no matter bow many individual stockholders it mayhave, extremely large blocks are held by a handful of people. Indeed, the same statisticalpresentation of TNEC showed some large companies to be 100 per cent owned by a singleshareholding: Great Atlantic and Pacific Tea Company, Ford Motor Company and HearstConsolidated Publications. In the 1930's it was quite common for big public utilityoperating companies to be 100 per cent owned by a holding company and for entireissues of preferred stock to be owned by a single stockholder.

   The TNEC study showed, in fact, that almost always only a fractionof 1 per cent of the stockholders (usually only a small fraction) in all the largecompanies own huge controlling blocks of stock. 7 Numerous small stockholderscollectively usually own only a minor percentage of outstanding stock.

   Let me here cite the TNEC percentages for a few companies commonlyregarded as widely held. American Can, .2 per cent of stockholders owned 29.9 percent, .8 per cent owned 45.2 per cent; Coca-Cola, .7 per cent owned 66.1 per cent;Corn Products, .4 per cent owned 37.3 per cent; Consolidated Edison, .2 per centowned 30.8 per cent; Eastman Kodak, .1 per cent owned 16 per cent; General Motors,.6 per cent owned 65.5 per cent; Sears, Roebuck, .2 per cent owned 44.9 per cent;Texas Corporation, .3 per cent owned 31.8 per cent, etc. The pattern rarely varies.And when it does it gives no support to those who argue that stock is widely held.Thus, in Anderson, Clayton & Co., then and now the largest cotton merchandisersin the world, 10 per cent of stockholders held 73.6 per cent of common stock; and26.7 per cent held 95.8 per cent. But the 10 per cent consisted of three shareholdingsand the 26.7 per cent of eight shareholdings., for this was a company with very fewstockholders.

   The fact that all companies are not cited in what follows, therefore,does not indicate that there are companies without very small groups of large stockholders,All it indicates is that there has been no recent citation of such evidence for somecompanies in the SEC reports.

   This can flatly be. said as a fact: There is no Americanproducing company that is controlled through a representative directorship by orprimarily on behalf of a set of stockholders each of which owns or has a beneficialinterest in. only an infinitesimal proportion of outstanding shares. "People'scapitalism" has this in common with "people's democracy": The rankand file doesn't have much to say, which is what common sense alone would lead oneto suppose.

   The method of disproving this sweeping statement (what logicianscall a universal statement) is extremely easy. All anyone has to do is to point tothe exceptional company and the statement is falsified. The company usually pointedto as the exceptional case, AT&T, is clearly not such a case; nor is GeneralElectric. There is no company on the TNEC list, analyzed with a view to disclosingsuch data, that meets the requirement.

   Bearing all this in mind, let us now look at the broad evidenceof large interests that has been revealed in recent SEC reports. The dates headingeach section of companies are the dates of the separate weekly issues of The ValueLine Investment Survey.

   The additional companies with recently revealed large controllingowning individuals or groups of stockholders are as follows (instances repeatingour findings from the SEC reports have been retained):

October 1, 1965
Allied Supermarkets        Officers control about 50 percent of sharesBroadway-Hale Stores       Hale Bros. Associates owns 20 per cent of                           stockCity Stores                Bankers Securities Corp. owns about 75 per                           cent; G. A. Amsterdam, Chairman, and                           associates own majority control of Bankers                           SecuritiesEmporium Capwell           Broadway-Hale Stores, Inc., owns 23.9 per                           CentGimbel Brothers            Directors and associates interested in about                           15 per cent of sharesW. T. Grant                W. T. Grant owns 14 per cent common                           stock; Grant Foundation, 12 per centS. Klein Dept. Stores      McCrory Corp. owns 18.6 per cent of out-                           standing stockE. J. Korvette             F. Ferkauf and family own 28 per cent of                           StockSears, Roebuck             Employee pension fund owns 24 per cent                           (Rosenwald family owns at least 12.5 per                           cent by TNEC study and scattered SEC                           reports.)Bond Stores                Directors interested in 14.1 per centDiana Stores               Directors vote 26.2 per cent of outstand-                           ing stockLane Brvant                Directors vote 28 per centS. S. Kresge               Directors vote about 3 per cent of stock;                           Kresge Foundation, 21.6 per centMcCrory                    Rapid-American Corporation owns 50.5                           per cent of commonNeisner Brothers           51 per cent of stock controlled by Neisner                           FamilyJ. J. Newberry             Newberry family controls about 40 per                           cent commonPeoples Drug Stores        Trusts of the Gibbs family control about                           13 per cent of stockColonial Stores            National Food Products Corp. holds 33 per                           cent common; directors own about 17 per                           cent Colonial common, 21 per cent Na-                           tional FoodFood Fair Stores           Friedland family controls about 35 per                           cent commonFood Giant Markets         Management controls about 35 per cent                           common and 51 per cent preferred stockFood Mart                  Management controls about 10 per cent of                           SharesGrand Union                L. A. Green, director, and relatives own                           9.0 per cent common and 10.9 per cent                           convertible debenturesGreat Atlantic & Pacific   Hartford Foundation and members of fam-   Tea Co.                 ily own 72 per cent of stockNational Tea               Company controlled by W. Garfield Weston   Penn Fruit                 Directors own about 35-40 per cent commonVon's Grocery              Von Der Ahe family owns 43.6 per cent of                           stock; Hayden family owns 19.5 per centWinn-Dixie Stores          Davis family of Florida owns 28 per cent                           commonBeaunit Corp.              El Paso Natural Gas owns 32 per centNational Sugar Refining    H. Havernever, Jr., and H. W. Havemeyer                           and their associates own 28 per centNorth American Sugar       Kaiser family owns 25 per centAmerican Crystal Sugar     North American Sugar holds 9 per centSucrest Corp.              Taussig family controls about 42 per cent
October 8, 1965
Columbia Broadcasting      W. S. Paley and directors control about 15                           per centDesilu                     Lucille Ball, actress, owns 50 per cent                           common and Class B combinedDisney Productions         Directors own or control about 41 per centMCA, Inc.                  Directors own 45 per cent commonHilton Hotels              Conrad Hilton and directors own 27 per                           cent of stockHoward Johnson             About 38 per cent is owned by Johnson                           FamilySheraton Corporation       Henderson and Moore families own 22 percent

October 15, 1965

   Only banks and insurance companies, involving secondary holdingsof assets, are listed in the issue of this date, and usually the dominant interestsare not shown because there are few changes in key holdings from year to year.

   The known dominant interest of the Mellons in the Mellon NationalBank or of the Rockefellers in the Chase National Bank is therefore not alluded to.On the basis of either the SEC or TNEC reports there is no direct evidence of suchinterests, which are known on other grounds such as presence among directors. Ifa Mellon, Rockefeller, Du Pont or similar personage is on the board of directorsof a bank, one has no reason to suppose that he is contributing his widely informedinsight to a profit-making institution in which he has no beneficial stake.

   In general, among banks and insurance companies there is aneven smaller distribution of small holdings than in some of the well-known industrialcompanies because they are more apt to attract a rarer sophisticated type of investorwith a better understanding of these relatively complicated media. Values in theshares of financial companies are leveraged by more subtle factors than are thoseof most industrial companies and often the true values are concealed. In general,in the mid-1960's, the values of most banks and insurance company stocks were understatedin market price while the values of most industrial companies were grossly overstated.These discrepancies correct themselves in time. But a sophisticated investor, buyinga stock at 50 which he knows to be worth 100 (and such situations can be pointedto), does not mind if the price does not immediately advance or even if it declinesstill further. He knows that eventually it must work out at its true value. Meanwhile,he can presumably afford to wait.

   But in this issue of The Value Line Investment Surveyit is pointed out that the Transamerica Corporation, an investment company, holdsan 11 per cent interest in Crocker-Citizens National Bank of California. Transamericawas established by the Giannini interests, which built the Bank of America of Californiainto the biggest commercial bank in the world.

October 22, 1965
Aerojet-General                 General Tire owns 84 per cent of voting                                StockBeech Aircraft                  Mrs. O. A. Beech controls 17 per cent;                                directors 4 per centDouglas Aircraft                J. S. McDonnell controls 5 per centMcDonnell Aircraft              J. S. McDonnell, Jr., owns 14 per cent                                common; other officers 5 per centFairchild Hiller                Sherman M. Fairchild and other directors                                own ./control 7 per centGeneral Dynamics                Henry Crown controls almost all of 896.7                                million preferred stockGrumman Aircraft Engineering    Directors control 8.5 per centMarquardt Corporation           Laurance Rockefeller owns 16 per centPiper Aircraft                  W. T. Piper controls about 18 per centChrysler                        Consolidation Coal (Hanna-Mellon) owns                                7 per cent, directors 1 per centAmerican Metal Products         Directors own about 6.5 per centChampion Spark Plug             Management owns about 66 per centDana                            C. A. Dana owns 9.5 per cent common;                                Dana Foundation 16.4 per centEltra                           American Mfg. owns 33.4 per cent of stockFram                            S. B. Wilson and family control 11 per centGulf & Western Industries       Directors control about 20 per cent commonA. 0. Smith                     Smith family owns about 53 per cent of                                StockTimken Roller Bearing           Directors have 22 per centGeneral Battery and Ceramic     Officers/directors control about 26 per cent                                CommonGlobe-Union                     Sears, Roebuck owns 12 per centGould-National                  Directors own about 24 per centDivco-Wayne                     Directors own 28 per centDeere                           Directors own 14.5 per centArmstrong Rubber                Sears, Roebuck owns 9 per cent; directors                                about 11 per centFirestone Tire & Rubber         Firestone family owns about 21 per cent                                of stockGeneral Tire & Rubber           Directors control 17 per cent
October 29, 1965
Braniff Airways                 Greatamerica Corp. owns 58 per centKLM Royal Dutch Airlines        Dutch government owns 51 per centNational Airlines               Directors own about 13 per centNortheast Airlines              Storer Broadcasting owns 87 per centTrans World Airlines            77 per cent of stock held in trust for                                Hughes Tool Co., owned by Howard HughesNew York Central RR             Allan P. Kirby controls; he owns 4.5 per                                cent directly and controls 15 per cent                                through Alleghany Corp.Pittsburgh & Lake Erie RR       81 per cent owned by New York CentralSoo Line RR                     Canadian Pacific owns 56 per centPittsburgh Forgings             Directors own/control 12 per centAmerican Commercial Lines       16 per cent closely heldAmerican Export Isbrandtsen     Isbrandtsen Co. owns 26.3 per cent commonLykes Bros. Steamship           Directors own 15 per cent; another 50 per                                cent closely held by Lykes family interestsMcLean Industries               Directors own 60 per centMoore and McCormack             Directors interested in 34 per centCooper-Jarrett                  About 35 per cent of stock closely heldMcLean Trucking                 About 20 per cent of stock closely heldMerchants Fast Motor Lines      G. and C. L. Whitehead own 47.2 per centRoadway Express                 Galen J. Roush family owns about 52 per centRyder System                    Directors control about 53 per centSpector Freight                 Directors own about 47 per cent
November 5, 1965
Amerada Petroleum               United Kingdom government owns about                                10.8 per centBritish American Oil            65 per cent owned by Gulf Oil (Mellon)Creole Petroleum                95.4 per cent owned by Standard Oil (New                                Jersey) (Rockefeller)Hess Oil & Chemical             Leon and Moses Hess interests control 66                                per centImperial Oil                    70.2 per cent owned by Standard Oil                                (New Jersey) (Rockefeller)Kerr-McGee                      McGee interests control more than 11 per                                cent of stockMurphy Oil                      Management controls 56 per centPacific Petroleums              Phillips Petroleum (Du Pont presence)                                owns 45 per centRichfield Oil                   Sinclair and Cities Service did own 61 per                                cent (Atlantic Refining [Rockefeller] now                                owns)Shell Oil                       69.4 per cent owned by Royal Dutch/Shell                                GroupSignal Oil & Gas                Officer-directors own majority of Class B                                voting commonSuperior Oil                    More than 50 per cent owned by Keck                                FamilyCoastal States Gas Producing    Directors own about 19 per centTexas Gas Transmission          Hillman family owns 11 per cent commonTranscontinental Gas Pipe Line  Stone and Webster, Inc., owns 11 per cent                                common; directors 2.6 per centAyrshire Collieries             B. F. Goodrich and associates own 43 per                                cent commonConsolidation Coal              M. A. Hanna controls with 15 per cent of                                common stock; dominant Mellon presenceEastern Gas & Fuel Associates   26 per cent closely heldPeabody Coal                    Directors own 16.3 per cent of voting stockPittston                        Directors control about 11 per cent com-                                mon; Pitcairn family presenceUnited Electric Coal            General Dynamics owns 53 per cent
November 12, 1965
Diamond Alkali                  Directors own 6.2 per cent common; Mel-                                lon National Bank as fiduciary 12.7 per                                centInternational Salt              The Fuller family holds about 10 per centKoppers                         Directors control 10 per cent, but long                                time Mellon interestMinerals & Chemicals Philipp    50 per cent stock closely heldMinnesota Mining & Mfg.         Directors own 19 per centNational Starch & Chemical      Mr. and Mrs. F. K. Greenwall own more                                than 20 per centOccidental Petroleum            Directors, including Armand Hammer and                                Frederic Gimbel, own 14 per centOlin Mathieson Chemical         Olin family and directors own 15 per centPittsburgh Coke and Chemical    Directors own or control about 57 per centReichhold Chemicals             H. H. Reichhold owns 14 per cent of commonRemington Arms                  E. I. du Pont de Nemours owns 60 per cent                                common, 99.6 per cent preferredRohm & Haas                     70 per cent of stock closely held (mainly                                by Rohm and Haas families)Stauffer Chemical               16 per cent of stock controlled by directorsSun Chemical                    N. E. Alexander, president, owns about 20                                per cent commonU.S. Borax & Chemical           73 per cent owned by Borax, Ltd.Wallace & Tiernan               Wallace, Tiernan and Strasenburgh fami-                                lies own 54.5 per centWitco Chemical                  Directors control 56 per centAmerican Hospital Supply        Directors own 13.6 per centBaxter Laboratories             Management controls 25 per cent commonCarter-Wallace                  CPT Development Corp., controlled by                                Hoyt family, owns 51.9 per centJohnson & Johnson               42.4 per cent controlled by Johnson familyKendall                         Directors own 20 per cent commonEli Lilly                       Lilly Endowment, Lilly family and associ-                                ates own 100 per cent of Class A voting                                stock; only 25 per cent of Class B non-                                voting stock publicly heldMcKesson & Robbins              Foremost Dairies owns 25 per centMead Johnson                    Directors bold 49.6 per cent of voting stockMiles Laboratories              Management controls about 12.4 per cent                                of outstanding stockPlough, Inc.                    A. Plough, president, owns 13 per centRexall Drug                     Directors own 12.3 per centW. H. Borer                     Borer family owns 36 per centG. D. Searle                    Searle family controls 46 per centSmith, Kline & French           Directors control 32 per cent   LaboratoriesSyntex Corp.                    Allen & Co., investment bankers, own 20                                per cent; directors about 7 per centUpjohn                          Upjohn family owns 47 per centWarner-Lambert Pharmaceutical   Directors own 12.2 per cent commonAnheuser-Busch                  Busch family and directors own about 24                                per centDrewrys                         Directors interested in about 10.1 per centFalstaff Brewing                Directors control about 13.3 per centPabst Brewing                   "Management stockholdings are under-                                stood to be large"Joseph Schlitz Brewing          Owned 93 per cent by Uihlein familyBrown Shoe                      Directors control about 8.5 per centEdison Bros. Stores             Edison family owns 15 per centGenesco                         Officers and directors own 21 per cent                                CommonGreen Shoe                      Officers and families own about 26.5 per                                CentInternational Shoe              Directors own 9.5 per centU.S. Shoe                       Directors own about 15 per centWolverine Shoe and Tanning      Krause family controls 45 per cent
November 19, 1965
Duke Power                      Duke, Doris Duke Trust and Duke Endowment                                control 73 per cent common stock   (Note: In most of the electric power and light companies directors usually   own 1 per cent or less of the stock and the large stockholders in recent   years do not trade; the large holdings, therefore, are not reflected in   recent SEC reports but must be sought in the original SEC prospectuses.)
November 26, 1965
American Cement                 Directors own about 25 per cent of stock(Philip) Carey Mfg.             Directors and families own about 10 per                                centCongoleum-Nairn                 Power Corporation owns 26.3 per cent;                                directors 7.5 per centCorning Glass Works             Houghton family owns 33 per centCrane                           Directors own 18 per centDe Soto Chemical                Sears, Roebuck owns 52 per cent commonKaiser Cement & Gypsum          Kaiser family and directors own 24 per                                cent commonKaiser Industries               Kaiser family owns about 50 per cent commonMarquette Cement                Directors own 18.7 per cent commonMasonite                        Directors own 14.5 per centNational Homes                  Officers and directors own 32.7 per centOwens-Corning                   Owens-Illinois Glass (Levis) and Corning                                Glass (Houghton) each own 31.1 per cent                                CommonPittsburgh Plate Glass          Pitcairn family owns 30 per cent stock                                through The Pitcairn Co.Screw and Bolt                  Directors control 26.4 per centWallace-Murray                  About one-third of common and two                                thirds of convertible preferred owned by                                Charles H. Dyson and F. H. KissnerWalworth                        General Waterworks owns 49.9 per centWelbilt                         Hirsch interests own 70 per cent commonHudson Pulp and Paper           Abraham Mazer Family Fund, Inc., controls                                60.25 per cent common with management                                interestsRiegel Paper                    Directors control about 10 per centAmerican Distilling             Directors own about 20 per centJames B. Beam Distilling        Directors control about 55 per centBrown-Forman Distillers         Directors own about 25 per cent of Class                                A, 20 per cent Class BDistillers                      Bronfman family holds more than 38.8 per                                CentHeublein                        Directors own 16 per cent of stock; addi-                                tional 25 per cent held in trust for                                insiders and familiesNational Distillers             12 per cent common owned by Panhandle                                Eastern Pipe LinePublicker Industries            S. S. Neuman owns 25 per cent common,                                controls additional 30 per centSchenley Industries             Directors and associates own 30 per cent                                common
December 3, 1965
Admiral                         Siragusa family owns about 40 per centAmp                             Directors own or represent about 33 per                                CentAvnet                           Avnet family owns 25.8 per centBunker-Ramo                     Martin Marietta owns about 62 per centBundy                           Officers and directors own 35 per centCollins Radio                   Collins family owns 24.4 per centConsolidated Electronics        U. S. Philips Trust owns directly and in-   Industries                   directly about 33 per cent commonCTS                             Directors own about 43 per centEmerson Electric                Directors own 8 per centEmerson Radio                   Directors own more than 33 per centFairchild Camera                S. M. Fairchild of IBM owns 20 per centCornell-Dubilier Electric       98 per cent owned by Federal Pacific Elec-                                TricPioneer Electric                100 per cent owned by Federal Pacific                                ElectricFoxboro                         About 49 per cent is closely heldGeneral Instrument              Directors own about 20 per centGeneral Precision Equipment     Directors own about 10 per centHoffman Electronics             H. Leslie Hoffman and his family own                                about 22 per centIndiana General                 Directors control about 7.9 per centInternational Resistance        Directors control about 10 per centMagnavox                        Officers and directors own about 9 per centMaytag                          Directors own about 15 per centMcGraw-Edison                   Officers and directors own 9.4 per centMotorola                        Galvin family controls 24 per cent; other                                insiders own additional 12 per centRobertshaw Controls             Reynolds Metals, largely owned by Reynolds                                family, owns 30 per centRonson                          Directors control more than 15 per centSangamo Electric                Bunn and Lamphier families control 25 per                                CentSchick Electric                 Eversharp and Technicolor own 25 per centSchlumberger                    Schlumberger family controls about 50 per                                CentSunbeam                         Directors own about 13 per centTung-Sol Electric               Directors own or control about 22 per cent                                of commonVarian Associates               Directors and officers own about 17 per                                cent of stockWhirlpool                       RCA owns .5 per cent; Sears, Roebuck 7.5                                per cent; directors 6 per centZenith Radio                    Directors own 7 per centCarolina Telephone & Telegraph  Bell System owns about 18 per centComsat                          50 per cent owned by the common carriers;                                balance by general stockholdersNew England Telephone           AT&T owns about 69 per centPacific Telephone               AT&T owns about 90 per centSouthern New England            AT&T owns 18.4 per cent   TelephoneCentral Telephone               Western Power and Gas owns 57 per cent                                CommonAddressograph-Multigraph        Directors own about 15 per cent of stockAmerican Photocopy              Rautbord family owns about 27 per centControl Data                    Directors own about 6 per cent
December 10, 1965
Cyclops                         Directors own about 6 per centDetroit Steel                   Directors control 13.7 per centEastern Stainless Steel         Officers and directors own about 8 per centFirth Sterling                  Directors own 11.7 per cent commonHarsco                          Directors have about 10 per cent of stockInterlake Steel                 Pickands Mather & Co. own 9.2 per cent                                common; directors 3.4 per centKaiser Steel                    Kaiser Industries, owned by Kaiser family,                                owns 79 per centLukens Steel                    Huston family owns 38 per centNational Steel                  M. A. Hanna Co. owns 22 per cent, in-                                siders 3.5 per centPhoenix Steel                   Insiders own about 25 per cent commonPittsburgh Steel                Directors control about 21 per cent commonU.S. Pipe & Foundry             Directors own about 2 per cent, Freeport                                Sulphur 5.7 per centWheeling Steel                  Hunt Foods & Industries own 11.1 per                                cent; Cleveland Cliffs Iron 4.8 per cent;                                directors 1 per centWoodward Iron                   Woodward family holds about 15.4 percent;                                 directors about 8 per cent commonAmerican Metal Climax           Selection Trust owns 12.2 per cent com                                mon; directors 4.2 per cent; Phelps Dodge                                4 per centAmerican Zinc, Lead & Smelting  Consolidated Goldfields of South Africa                                owns 61 per centBunker Hill                     Hecla Mining owns 9.75 per cent commonCampbell Red Lake               Dome Mines, Ltd., owns 57 per centCleveland-Cliffs Iron           Directors own about 5 per cent; Detroit                                Steel 22 per centConsolidated Mining             Canadian Pacific owns 51.5 per centCopper Range                    American Metal Climax owns 17.5 per                                cent; Blacton & Co. 12.5 per centGreat Northern Iron             In trust for lifetime of 18 personsHarvey Aluminum                 Harvey family owns all Class B stockHudson Bay Mining               Anglo-American Corporation owns 18 per                                cent commonInspiration Consol. Copper      Anaconda Co. owns about 28 per cent of                                StockKaiser Aluminum                 Kaiser interests own 45.2 per cent commonMagma Copper                    Newmont Mining owns 80.6 per cent commonMcIntyre-Porcupine Mines        Shares closely heldNewmont Mining                  Directors own more than 15 per cent commonReynolds Metals                 Directors, mainly members of Reynolds                                family, control about 19 per centUnited Nuclear                  Olin Mathieson and Malinckrodt Chemical                                Works own nearly 30 per centVanadium                        Directors control about 11 per centCalumet & Hecla                 Directors control about 9 per cent commonContinental Copper              Directors Control 7 per cent commonFansteel Metallurgical          Directors control 9 per cent of stockGeneral Cable                   American Smelting owns 36 per centHowmet                          Pechiney (France) owns 49 per cent com-                                mon; directors control 8 per centInternational Silver            Directors control 9 per cent commonRevere Copper & Brass           American Smelting owns 34 per cent of                                stock
December 17, 1965
American Chain & Cable          W. T. Morris Foundation owns 17.8 per                                cent of stock; directors 3.1 per centBaker Oil Tools                 Directors hold about 16 per cent commonClark Equipment                 Directors and families own about 12 per                                cent of stockContinental Motors              Ryan Aeronautical owns about 47 per                                CentFoster Wheeler                  Directors own 5.7 per cent; Financial                                General Corp. owns 13.5 per centGardner-Denver                  Directors represent 7.1 per centHalliburton Co                  Directors own about 8 per centIngersoll-Rand                  Directors own 6 per cent commonLeesona                         Directors own about 17 per centLink-Belt                       Directors own about 6 per centMcNeil                          Directors own 11 per centMesta Machine                   Directors own about 6 per cent commonOutboard Marine                 Ralph S. Evinrude owns/controls 14 per                                cent of stockRockwell Manufacturing          Rockwell family controls 19 per centSymington Wayne                 Directors own 10 per centTextron                         Directors own 6.5 per cent commonS. S. White                     Directors own about 6 per cent commonBrown & Sharpe Manufacturing    Henry B. Sharpe, president, and family                                own 34 per cent of stockCarborundum                     Mellon family and related interests own                                about 21 per cent commonCincinnati Milling Machine      Directors and families own 21.7 per cent                                CommonGiddings & Lewis                Directors and families own 21 per cent of                                stock; Motch & Merryweather Machinery                                10 per centKearney & Trecker               Trecker family owns about 50 per centNorton                          Officers and directors own 11 per cent                                CommonUTD                             Directors interested in 25.3 per cent of                                StockDr. Pepper                      Directors hold about 11 per centRoyal Crown Cola                Directors hold 14.6 per cent; Pickett and                                Hatcher Educational Fund 2.9 per centGeneral Baking                  Goldfield Corp. owns 51 per cent commonUnited Biscuit                  Directors own 18 per cent of stockWard Foods                      Directors interested in 32 per cent of stockJohn Morrell                    Directors hold 18 per centCampbell Soup                   Dorrance estate owns in trust about 64.3                                per centChock Full O'Nuts               William Black, chairman and founder, con-                                trols about 15 per cent commonConsolidated Foods              Nathan Cummings owns 9.4 per cent of                                stock; Union Sugar 8.2 per centGerber Products                 Gerber family and directors own about 30                                per cent commonH. J. Heinz                     Heinz family owns more than 37 per cent                                CommonHershey Chocolate               Milton Hershey School owns 66 per cent                                of stockHunt Foods & Industries         Directors own about 7.9 per cent commonLibby, McNeill & Libby          Foreign interests own 40 per cent commonA. E. Staley                    Staley family owns 60 per cent commonStokely-Van Camp                A. J. Stokely, president, and directors own                                or control 31 per cent commonWilliam Wrigley, Jr.            Wrigley interests and directors control                                about 35 per cent commonEversharp                       Directors own about 15 per cent of stockMax Factor                      Directors own 99.9 per cent common and                                33.5 per cent Class A sharesHelene Curtis Industries        Directors own 53 per cent of stockRevlon                          Directors own 99.9 per cent Class B and                                11 per cent commonPet Milk                        Leading stockholders own about 65 per                                cent commonAnderson, Clayton               Directors control 48 per cent of stockKellogg                         W. K. Kellogg Foundation controls 51 per                                cent commonPillsbury                       Directors control about 6 per cent of stockBulova Watch                    Directors control 19 per centHewlett-Packard                 Directors own about 70 per centPolaroid                        Directors control about 25 per centTektronix                       Directors and officers own 57 per centAlleghany                       Allan P. Kirby owns about 40 per cent                                common in this company with big holdings                                in New York Central RR, Missouri Pacific                                RR, Transamerica and Investors Diversi                                fied ServicesGeneral American Investors      Directors own about 11 per cent commonInvestors Diversified Services  Alleghany owns 43 per cent voting stock

   The burden of proof has clearly been shifted in this chapterto those who contend that stock ownership and corporate control are widely dispersedamong many small stockholders. All available evidence, direct and statistical, standsas an insurmountable barrier against the contention.

   Any low percentages of participation in the foregoing list shouldnot be taken as implying that they exhaust the concentrated interest. All they indicateis that this is the concentrated interest as shown under the rules of the SEC. Inevery single case, even where only a 5 per cent interest is shown, deeper inquirywould show, almost invariably, that far fewer than 1 per cent of stockholders ownedthe bulk of the stock or enough to give working control.

   Even Fortune, after many years of surrender to the Berle-Meansfantasy that ownership is divorced from control in most of the big companies, hasnow (June 15, 1967 ) come over to recognizing that the big owners have more thana little to say. What Berle-Means did. initiating the fantasy, was to confuse controlwith operating direction. Company managers, whether themselves owners or nonowners,are always in charge of operations, by tacit or explicit leave of the big owners.The issue of control is seldom raised. But when it is, as most recently with a bigcompany in the case of the New York Central Railroad, the nonowning management walksthe plank. In this case the big owners turned out to be the Young-Kirby-Murchisongroup.

   "After more than two generations during which ownershiphas been increasingly divorced from control," says Fortune rather misleadingly,"it is assumed that all large U.S. corporations are owned by everybody and nobody,and are run and ruled by bland organization men. The individual entrepreneur or familythat holds onto the controlling interest and actively manages the affairs of a bigcompany is regarded as a rare exception, as something of an anachronism. But a closelook at the 500 largest industrial corporations does not substantiate such sweepinggeneralizations.

   "In approximately 150 companies on the current Fortune500 list, controlling ownership rests in the hands of an individual or of the membersof a single family. Significantly, these owners are not just the remnants of thenineteenth-century dynasties that once ruled American business. Many of them arerelatively fresh faces. In any event, the evidence that 30 per cent of the 500 largestindustrials are clearly controlled by identifiable individuals, or by family groups,is something to ponder. It suggests that the demise of the traditional American proprietorhas been slightly exaggerated and that the much-advertised triumph of the organizationis far from total."

   While it is true that the big owners are not "just"remnants, they nevertheless, among other things, are indeed remnants. And while truethat many are "relatively fresh faces," nearly all show strong ancestralresemblances or bear established ancestral names already mentioned many times inthis book. They are heirs.

   Fortune's list of 150 concerned only an individual owneror a single family that holds the controlling interest and is active in the management.In the case of the 350 other largest industrials, which were not touched upon, controlalso rested with a small number of owners (as distinct from nonowning managers andmany small stockholders): either multi-family ownership groups consisting of as manyas five to seven families or individual members of a functionally related financialgroup. In no case, except when a company is under court-sanctioned trustees, canit be shown that ownership is divorced from control, although in many cases it isdivorced from active management.

   While taking cognizance of the Fortune article, and largelyendorsing it as far as it goes, I, for my part, learned nothing from it that I havenot known for thirty years. Its significance was not that it told something new butthat it represented some open backtracking from the Berle-Means contention that ownershiphas been, or is being, divorced from company control and that full control ratherthan delegated management is being exercised by professionally trained nonowningmanagements.

   What is most interesting--to me, at any rate--is why steps arenow being taken to abandon, at least partly, the Berle-Means fantasy, which has beenwidely disseminated and has many quite distinguished followers. There was nothinginherently marvelous about the theory; what led to its being given wide currencywas that it served to gull an always gullible public with the idea that propertywas losing its power and that something akin to socialism (but better) was evolvingbefore our eyes. The United States was going to retain private property but at thesame time it was going to have collective nonprofit-oriented, professional managementin the corporations; if the owners, particularly the big owners, did not like thisthey would be powerless. As far as that went, big ownership itself was going outof existence.

   In brief, this was a useful myth in manipulating restive publicsentiment, particularly in the Depression and spectacular World War II. The ideathat big stockholders were either impotent or vanishing was widely relished.

   As I surmise, the myth is being abandoned precisely becauseof this depiction of the stockholders, particularly the big ones, as impotent. Asa psychiatrist might say, the stockholders are shown in the Berle-Means script ascastrates, displaced by bright young men tip from Swampwater College with nothingbut technique to offer: know-how and can-do. Objectively serviceable though the mythhas been for the big proprietors, it has been subjectively and personally humiliating.Instead of being seen by his wife, children and friends as an authentic bigwig, theboss (which he is), the top owner-manager has had himself publicly presented as somethingof a corporate tabby cat. As the Fortune sample list of 150 shows, he is anythingbut this. He is, in fact, far more autonomous and far-ranging than any Soviet industrialcommissar, who is always under the tight leash of the Communist Party. The commissaraccepts policy; the big owners make or shape policy. They are not the puppets ofnonowning corporate managers.

   What must have happened in a general way, it seems to me, isthat somebody grumbled about this constant depiction of stockholders as the pawnsof puissant corporate officials who came from nowhere, and the grumbling was finallybeard by the big ears up at Fortune. And now we see the beginning of the dismantlingof what had become a sturdy myth, although quite a few academicians are still bemusedby it and see something akin to socialism (only better) developing by gradual administrativefiat promulgated by expert nonowning managers to whom profits are secondary, publicwelfare primary.

 


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