No More Learning

It is The Value Line Investment Survey, published by Arnold Bernard and Company of New York. This Survey, devoted to analyzing investment properties, keeps a large number of well-known listed companies under a thirteen-week cyclical survey each year. The facts about to be listed were taken
from the summaries of this Survey, which were compiled from the 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 share of stock worth $5 is a stockholder, we have already seen that most people do not own any stock at all. The thesis that stock ownership is widespread and the further thesis that most stock owners hold a great deal of stock is false. Only a very few people own stock in significant quantities. Just how few is shown by the cited University of Michigan studies.
In certain companies, it is true, stock ownership is widespread compared 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--100 to 500 shares--does not prove he is a small stockholder. He may and often does hold stock in many companies.
Although a company like AT&T does indeed have many small stockholders--persons owning 50 to 100 shares and perhaps little or no other stock--the carefully nurtured propaganda even about AT&T is grossly misleading. This propaganda asserts 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 stock in AT&T he would be enormously wealthy, worth about $160 million, but AT&T has large stockholders whose exact percentage of holdings today would be disclosed only by a government investigation addressing itself to this question. The United Kingdom government, for example, was until recently a very large stockholder in AT&T as well as in other American and European companies. European governments are large stockholders in many American and European companies. Additionally, private investment holding companies and family trust funds are large holders. The stockholdings interest even in AT&T, then, is not so completely generalized as one might conclude upon being 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, that would be 5 per cent of the stock, worth about $1. 6 billion, and a long step toward working control.
In presenting the following list of dominant interests in a wide variety of companies it should be noticed that the big stockholders are usually characterized as a family or group of officers and directors. This is done to save space; anyone can look up officers and directors in standard reference manuals if he is interested in identities. Scores of companies reported in The Value Line Investment Survey are not listed. In general, those are not listed in which no large interest is reported.
But just because large interests do not trade in a stock and because directors own only a few shares there is no reason to believe that large interests are not in the immediate background. In the General Electric Company, world's largest manufacturer of electrical appliances, directors own only 1 per cent of the stock and the SEC reports do not show any single stockholder or family group holding more than 10 per cent of the stock. Nevertheless, stockholdings in General Electric are quite concentrated.
The TNEC study, for example, as of November 24, 1939, showed that 86. 2 per cent of the stockholders, owning 19. 4 per cent of the stock, held fewer than 100 shares each. But 13. 8 per cent of the stockholders, owning 80. 6 per cent of the stock, held in blocks of more than 100 shares each. 3
Actually, out of 209,732 stockholders at the time, 522, or . 2 per 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. 4 At that time in E. I. du Pont de Nemours, known by current SEC data to be still closely held by the du Pont family, 0. 4
per cent of stockholders held 65. 7 per cent of all stock. 5 There is not much difference, then, between a company closely owned 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 the stockholders held 15. 3 per cent of stock and 0. 4 per cent of the stockholders held 21. 2 per cent of the stock (these figures being cumulative). 6
In a large company only 5 per cent of the stock, particularly if it is voted by the management, is generally considered to be a long step toward working control, and 15 per cent is said to be well-grounded working control. Only a powerful syndicate contending for the support of medium and small stockholders can 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 it is to absolute control. But working control is ordinarily sufficient for running the company and determining its policies.
AT&T in 1965 had 2,674,000 stockholders. If we assume there is now the same distribution of large stockholders its before World War II, then 534 stockholders now vote 7. 8 per cent of the stock, 2,674 vote 15. 3 per cent and 10,679 vote 21. 2 per cent of the stock. Thus is refuted the contention that in this most widely owned of American companies there is no power-center of concentrated ownership. And if these percentages do not now actually prevail, some closely similar set of percentages surely holds and it may well be that relatively fewer stock-holders own larger percentages of the stock now than in 1939.
The management of AT&T, far from representing a generalized wide interest in its stock, in fact acts at the behest of a small group of large stockholders and trust fund managers. The directors themselves hold less than 0. 1 per cent of the stock.
By consulting this same TNEC source anyone can ascertain that in every large American company, no matter bow many individual stockholders it may have, extremely large blocks are held by a handful of people. Indeed, the same statistical presentation of TNEC showed some large companies to be 100 per cent owned by a single shareholding: Great Atlantic and Pacific Tea Company, Ford Motor Company and Hearst Consolidated Publications. In the 1930's it was quite common for big public utility operating companies to be 100 per cent owned by a holding company and for entire issues of preferred stock to be owned by a single stockholder.
The TNEC study showed, in fact, that almost always only a fraction of 1 per cent of the stockholders (usually only a small fraction) in all the large companies own huge controlling blocks of stock. 7 Numerous small stockholders collectively usually own only a minor percentage of outstanding stock.
Let me here cite the TNEC percentages for a few companies commonly regarded as widely held. American Can, . 2 per cent of stockholders owned 29. 9 per cent, . 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 cent owned 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 merchandisers in the world, 10 per cent of stockholders held 73. 6 per cent of common stock; and 26. 7 per cent held 95. 8 per cent. But the 10 per cent consisted of three shareholdings and the 26. 7 per cent of eight shareholdings. , for this was a company with very few stockholders.
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 some companies in the SEC reports.
This can flatly be. said as a fact: There is no American producing company that is controlled through a representative directorship by or primarily on behalf of a set of stockholders each of which owns or has a beneficial interest in. only an infinitesimal proportion of outstanding shares. "People's capitalism" has this in common with "people's democracy": The rank and file doesn't have much to say, which is what common sense alone would lead one to suppose.
The method of disproving this sweeping statement (what logicians call a universal statement) is extremely easy. All anyone has to do is to point to the exceptional company and the statement is falsified. The company usually pointed to as the exceptional case, AT&T, is clearly not such a case; nor is General Electric. There is no company on the TNEC list, analyzed with a view to disclosing such data, that meets the requirement.
Bearing all this in mind, let us now look at the broad evidence of large interests that has been revealed in recent SEC reports. The dates heading each section of companies are the dates of the separate weekly issues of The Value Line Investment Survey.
The additional companies with recently revealed large controlling owning individuals or groups of stockholders are as follows (instances repeating our findings from the SEC reports have been retained):
Allied Supermarkets
Broadway-Hale Stores
City Stores
Emporium Capwell
Gimbel Brothers
about
W. T. Grant
S. Klein Dept. Stores
E. J. Korvette
Sears, Roebuck
Bond Stores
October 1, 1965
Officers control about 50 percent of shares
Hale Bros. Associates owns 20 per cent of
stock
Bankers Securities Corp. owns about 75 per
cent; G. A. Amsterdam, Chairman, and
associates own majority control of Bankers
Securities
Broadway-Hale Stores, Inc. , owns 23. 9 per
Cent
Directors and associates interested in
15 per cent of shares
W. T. Grant owns 14 per cent common
stock; Grant Foundation, 12 per cent
McCrory Corp. owns 18. 6 per cent of out-
standing stock
F. Ferkauf and family own 28 per cent of
Stock
Employee pension fund owns 24 per cent
(Rosenwald family owns at least 12. 5 per
cent by TNEC study and scattered SEC
reports. )
Directors interested in 14. 1 per cent
Diana Stores
Lane Brvant
S. S. Kresge
McCrory
Neisner Brothers
J. J. Newberry
Peoples Drug Stores
Colonial Stores
Food Fair Stores
Food Giant Markets
Food Mart
Grand Union
Great Atlantic & Pacific
Tea Co.
National Tea
Penn Fruit
Von's Grocery
Winn-Dixie Stores
Beaunit Corp.
National Sugar Refining
North American Sugar
American Crystal Sugar
Sucrest Corp.
Directors vote 26. 2 per cent of outstand-
ing stock
Directors vote 28 per cent
Directors vote about 3 per cent of stock;
Kresge Foundation, 21. 6 per cent
Rapid-American Corporation owns 50. 5
per cent of common
51 per cent of stock controlled by Neisner
Family
Newberry family controls about 40 per
cent common
Trusts of the Gibbs family control about
13 per cent of stock
National Food Products Corp. holds 33 per
cent common; directors own about 17 per
cent Colonial common, 21 per cent Na-
tional Food
Friedland family controls about 35 per
cent common
Management controls about 35 per cent
common and 51 per cent preferred stock
Management controls about 10 per cent of
Shares
L. A. Green, director, and relatives own
9. 0 per cent common and 10. 9 per cent
convertible debentures
Hartford Foundation and members of fam-
ily own 72 per cent of stock
Company controlled by W. Garfield Weston
Directors own about 35-40 per cent common
Von Der Ahe family owns 43. 6 per cent of
stock; Hayden family owns 19. 5 per cent
Davis family of Florida owns 28 per cent
common
El Paso Natural Gas owns 32 per cent
H. Havernever, Jr. , and H. W. Havemeyer
and their associates own 28 per cent
Kaiser family owns 25 per cent
North American Sugar holds 9 per cent
Taussig family controls about 42 per cent
October 8, 1965
Columbia Broadcasting
Desilu
Disney Productions
MCA, Inc.
Hilton Hotels
Howard Johnson
Sheraton Corporation
W. S. Paley and directors control about 15
per cent
Lucille Ball, actress, owns 50 per cent
common and Class B combined
Directors own or control about 41 per cent
Directors own 45 per cent common
Conrad Hilton and directors own 27 per
cent of stock
About 38 per cent is owned by Johnson
Family
Henderson and Moore families own 22 percent
October 15, 1965
Only banks and insurance companies, involving secondary holdings of assets, are listed in the issue of this date, and usually the dominant interests are not shown because there are few changes in key holdings from year to year.
The known dominant interest of the Mellons in the Mellon National Bank 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 such interests, which are known on other grounds such as presence among directors. If a Mellon, Rockefeller, Du Pont or similar personage is on the board of directors of a bank, one has no reason to suppose that he is contributing his widely informed insight to a profit-making institution in which he has no beneficial stake.
In general, among banks and insurance companies there is an even smaller distribution of small holdings than in some of the well-known industrial companies because they are more apt to attract a rarer sophisticated type of investor with a better understanding of these relatively complicated media. Values in the shares of financial companies are leveraged by more subtle factors than are those of 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 understated in market price while the values of most industrial companies were grossly overstated. These discrepancies correct themselves in time. But a sophisticated investor, buying a stock at 50 which he knows to be worth 100 (and such situations can be pointed to), does not mind if the price does not immediately advance or even if it declines still 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 Survey it is pointed out that the Transamerica Corporation, an investment company, holds an 11 per cent interest in Crocker-Citizens National Bank of California. Transamerica was established by the Giannini interests, which built the Bank of America of California into the biggest commercial bank in the world.
Aerojet-General
voting
Beech Aircraft
Douglas Aircraft
October 22, 1965
General Tire owns 84 per cent of
Stock
Mrs. O. A. Beech controls 17 per cent;
directors 4 per cent
J. S. McDonnell controls 5 per cent
McDonnell Aircraft
Fairchild Hiller
directors
General Dynamics
896. 7
Grumman Aircraft Engineering
Marquardt Corporation
Piper Aircraft
Chrysler
American Metal Products
Champion Spark Plug
Dana
Eltra stock
Fram cent
Gulf & Western Industries
common
A. 0. Smith
Timken Roller Bearing
General Battery and Ceramic
per cent
Globe-Union
Gould-National
Divco-Wayne
Deere
Armstrong Rubber
directors
Firestone Tire & Rubber
cent
J. S. McDonnell, Jr. , owns 14 per cent
common; other officers 5 per cent
Sherman M. Fairchild and other
own . /control 7 per cent
Henry Crown controls almost all of
million preferred stock
Directors control 8. 5 per cent
Laurance Rockefeller owns 16 per cent
W. T. Piper controls about 18 per cent
Consolidation Coal (Hanna-Mellon) owns
7 per cent, directors 1 per cent
Directors own about 6. 5 per cent
Management owns about 66 per cent
C. A. Dana owns 9. 5 per cent common;
Dana Foundation 16. 4 per cent
American Mfg. owns 33. 4 per cent of
S. B. Wilson and family control 11 per
Directors control about 20 per cent
Smith family owns about 53 per cent of
Stock
Directors have 22 per cent
Officers/directors control about 26
Common
Sears, Roebuck owns 12 per cent
Directors own about 24 per cent
Directors own 28 per cent
Directors own 14. 5 per cent
Sears, Roebuck owns 9 per cent;
about 11 per cent
Firestone family owns about 21 per
of stock
General Tire & Rubber
Braniff Airways
KLM Royal Dutch Airlines
National Airlines
Northeast Airlines
Trans World Airlines
Hughes
New York Central RR
per
Pittsburgh & Lake Erie RR
Soo Line RR
Pittsburgh Forgings
American Commercial Lines
American Export Isbrandtsen
common
Lykes Bros. Steamship
per
interests
McLean Industries
Moore and McCormack
Cooper-Jarrett
held
McLean Trucking
held
Merchants Fast Motor Lines
cent
Roadway Express
per cent
Ryder System
Spector Freight
Amerada Petroleum
British American Oil
Directors control 17 per cent
October 29, 1965
Greatamerica Corp. owns 58 per cent
Dutch government owns 51 per cent
Directors own about 13 per cent
Storer Broadcasting owns 87 per cent
77 per cent of stock held in trust for
Hughes Tool Co. , owned by Howard
Allan P. Kirby controls; he owns 4. 5
cent directly and controls 15 per cent
through Alleghany Corp.
81 per cent owned by New York Central
Canadian Pacific owns 56 per cent
Directors own/control 12 per cent
16 per cent closely held
Isbrandtsen Co. owns 26.
3 per cent
Directors own 15 per cent; another 50
cent closely held by Lykes family
Directors own 60 per cent
Directors interested in 34 per cent
About 35 per cent of stock closely
About 20 per cent of stock closely
G. and C. L. Whitehead own 47. 2 per
Galen J. Roush family owns about 52
Directors control about 53 per cent
Directors own about 47 per cent
November 5, 1965
United Kingdom government owns about
10. 8 per cent
65 per cent owned by Gulf Oil (Mellon)
Creole Petroleum
(New
Hess Oil & Chemical
66
Imperial Oil
Kerr-McGee
per
Murphy Oil
Pacific Petroleums
Richfield Oil
per
now
Shell Oil
Dutch/Shell
Signal Oil & Gas
Class B
Superior Oil
Coastal States Gas Producing
Texas Gas Transmission
95. 4 per cent owned by Standard Oil
Jersey) (Rockefeller)
Leon and Moses Hess interests control
per cent
70. 2 per cent owned by Standard Oil
(New Jersey) (Rockefeller)
McGee interests control more than 11
cent of stock
Management controls 56 per cent
Phillips Petroleum (Du Pont presence)
owns 45 per cent
Sinclair and Cities Service did own 61
cent (Atlantic Refining [Rockefeller]
owns)
69. 4 per cent owned by Royal
Group
Officer-directors own majority of
voting common
More than 50 per cent owned by Keck
Family
Directors own about 19 per cent
Hillman family owns 11 per cent common
Transcontinental Gas Pipe Line Stone and Webster, Inc. , owns 11 per
cent
Ayrshire Collieries
per
Consolidation Coal
of
Eastern Gas & Fuel Associates
Peabody Coal
stock
Pittston
com-
common; directors 2. 6 per cent
B. F. Goodrich and associates own 43
cent common
M. A. Hanna controls with 15 per cent
common stock; dominant Mellon presence
26 per cent closely held
Directors own 16. 3 per cent of voting
Directors control about 11 per cent
mon; Pitcairn family presence
United Electric Coal
Diamond Alkali
Mel-
per
International Salt
cent
Koppers long
Minerals & Chemicals Philipp
Minnesota Mining & Mfg.
National Starch & Chemical
Occidental Petroleum
Olin Mathieson Chemical
cent
Pittsburgh Coke and Chemical
cent
Reichhold Chemicals
common
Remington Arms
cent
Rohm & Haas
(mainly
Stauffer Chemical
directors
Sun Chemical
20
U. S. Borax & Chemical
Wallace & Tiernan
fami-
Witco Chemical
American Hospital Supply
Baxter Laboratories
General Dynamics owns 53 per cent
November 12, 1965
Directors own 6. 2 per cent common;
lon National Bank as fiduciary 12. 7
cent
The Fuller family holds about 10 per
Directors control 10 per cent, but
time Mellon interest
50 per cent stock closely held
Directors own 19 per cent
Mr. and Mrs. F. K. Greenwall own more
than 20 per cent
Directors, including Armand Hammer and
Frederic Gimbel, own 14 per cent
Olin family and directors own 15 per
Directors own or control about 57 per
H. H. Reichhold owns 14 per cent of
E. I. du Pont de Nemours owns 60 per
common, 99. 6 per cent preferred
70 per cent of stock closely held
by Rohm and Haas families)
16 per cent of stock controlled by
N. E. Alexander, president, owns about
per cent common
73 per cent owned by Borax, Ltd.
Wallace, Tiernan and Strasenburgh
lies own 54. 5 per cent
Directors control 56 per cent
Directors own 13. 6 per cent
Management controls 25 per cent common
Carter-Wallace
Johnson & Johnson
family
Kendall
Eli Lilly
associ-
voting non-
McKesson & Robbins
Mead Johnson
stock
Miles Laboratories
cent
Plough, Inc.
Rexall Drug
W. H. Borer
G. D. Searle
Smith, Kline & French
Laboratories
Syntex Corp.
20
Upjohn
Warner-Lambert Pharmaceutical
Anheuser-Busch
24
Drewrys cent
Falstaff Brewing
Pabst Brewing
Joseph Schlitz Brewing
Brown Shoe
CPT Development Corp. , controlled by
Hoyt family, owns 51. 9 per cent
42. 4 per cent controlled by Johnson
Directors own 20 per cent common
Lilly Endowment, Lilly family and
ates own 100 per cent of Class A
stock; only 25 per cent of Class B
voting stock publicly held
Foremost Dairies owns 25 per cent
Directors bold 49. 6 per cent of voting
Management controls about 12. 4 per
of outstanding stock
A. Plough, president, owns 13 per cent
Directors own 12. 3 per cent
Borer family owns 36 per cent
Searle family controls 46 per cent
Directors control 32 per cent
Allen & Co. , investment bankers, own
per cent; directors about 7 per cent
Upjohn family owns 47 per cent
Directors own 12. 2 per cent common
Busch family and directors own about
per cent
Directors interested in about 10. 1 per
Directors control about 13. 3 per cent
"Management stockholdings are under-
stood to be large"
Owned 93 per cent by Uihlein family
Directors control about 8. 5 per cent
Edison Bros. Stores
Genesco
Green Shoe
per
International Shoe
U. S. Shoe
Wolverine Shoe and Tanning
Duke Power
Endowment
Edison family owns 15 per cent
Officers and directors own 21 per cent
Common
Officers and families own about 26. 5
Cent
Directors own 9. 5 per cent
Directors own about 15 per cent
Krause family controls 45 per cent
November 19, 1965
Duke, Doris Duke Trust and Duke
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. )
American Cement
stock
(Philip) Carey Mfg.
per
Congoleum-Nairn
Corning Glass Works
Crane
De Soto Chemical
Kaiser Cement & Gypsum
Kaiser Industries
common
Marquette Cement
Masonite
National Homes
cent
Owens-Corning
Corning
cent
November 26, 1965
Directors own about 25 per cent of
Directors and families own about 10
cent
Power Corporation owns 26. 3 per cent;
directors 7. 5 per cent
Houghton family owns 33 per cent
Directors own 18 per cent
Sears, Roebuck owns 52 per cent common
Kaiser family and directors own 24 per
cent common
Kaiser family owns about 50 per cent
Directors own 18. 7 per cent common
Directors own 14. 5 per cent
Officers and directors own 32. 7 per
Owens-Illinois Glass (Levis) and
Glass (Houghton) each own 31. 1 per
Common
Pittsburgh Plate Glass
Screw and Bolt
Wallace-Murray
by
Walworth
Welbilt
common
Hudson Pulp and Paper
controls
Riegel Paper
American Distilling
James B. Beam Distilling
Brown-Forman Distillers
Class
Distillers
per
Heublein
addi-
National Distillers
Publicker Industries
Schenley Industries
cent
Admiral
Amp per
Avnet
Bunker-Ramo
Bundy
Pitcairn family owns 30 per cent stock
through The Pitcairn Co.
Directors control 26. 4 per cent
About one-third of common and two
thirds of convertible preferred owned
Charles H. Dyson and F. H. Kissner
General Waterworks owns 49. 9 per cent
Hirsch interests own 70 per cent
Abraham Mazer Family Fund, Inc. ,
60. 25 per cent common with management
interests
Directors control about 10 per cent
Directors own about 20 per cent
Directors control about 55 per cent
Directors own about 25 per cent of
A, 20 per cent Class B
Bronfman family holds more than 38. 8
Cent
Directors own 16 per cent of stock;
tional 25 per cent held in trust for
insiders and families
12 per cent common owned by Panhandle
Eastern Pipe Line
S. S. Neuman owns 25 per cent common,
controls additional 30 per cent
Directors and associates own 30 per
common
December 3, 1965
Siragusa family owns about 40 per cent
Directors own or represent about 33
Cent
Avnet family owns 25. 8 per cent
Martin Marietta owns about 62 per cent
Officers and directors own 35 per cent
Collins Radio
Consolidated Electronics
in-
Industries
CTS
Emerson Electric
Emerson Radio
Fairchild Camera
cent
Cornell-Dubilier Electric
Elec-
Pioneer Electric
Foxboro
General Instrument
General Precision Equipment
Hoffman Electronics
Indiana General
International Resistance
Magnavox
cent
Maytag
McGraw-Edison
cent
Motorola
other
Robertshaw Controls
Reynolds
Ronson cent
Sangamo Electric
per
Schick Electric
cent
Collins family owns 24. 4 per cent
U. S. Philips Trust owns directly and
directly about 33 per cent common
Directors own about 43 per cent
Directors own 8 per cent
Directors own more than 33 per cent
S. M. Fairchild of IBM owns 20 per
98 per cent owned by Federal Pacific
Tric
100 per cent owned by Federal Pacific
Electric
About 49 per cent is closely held
Directors own about 20 per cent
Directors own about 10 per cent
H. Leslie Hoffman and his family own
about 22 per cent
Directors control about 7. 9 per cent
Directors control about 10 per cent
Officers and directors own about 9 per
Directors own about 15 per cent
Officers and directors own 9. 4 per
Galvin family controls 24 per cent;
insiders own additional 12 per cent
Reynolds Metals, largely owned by
family, owns 30 per cent
Directors control more than 15 per
Bunn and Lamphier families control 25
Cent
Eversharp and Technicolor own 25 per
Schlumberger
per
Sunbeam
Tung-Sol Electric
cent
Varian Associates
per
Whirlpool
7. 5
Schlumberger family controls about 50
Cent
Directors own about 13 per cent
Directors own or control about 22 per
of common
Directors and officers own about 17
cent of stock
RCA owns . 5 per cent; Sears, Roebuck
per cent; directors 6 per cent
Directors own 7 per cent
Zenith Radio
Carolina Telephone & Telegraph Bell System owns about 18 per cent
Comsat
carriers;
New England Telephone
Pacific Telephone
Southern New England
Telephone
Central Telephone
Addressograph-Multigraph
stock
American Photocopy
Control Data
Cyclops
Detroit Steel
Eastern Stainless Steel
cent
Firth Sterling
Harsco stock
Interlake Steel
Kaiser Steel
family,
50 per cent owned by the common
balance by general stockholders
AT&T owns about 69 per cent
AT&T owns about 90 per cent
AT&T owns 18. 4 per cent
Western Power and Gas owns 57 per cent
Common
Directors own about 15 per cent of
Rautbord family owns about 27 per cent
Directors own about 6 per cent
December 10, 1965
Directors own about 6 per cent
Directors control 13. 7 per cent
Officers and directors own about 8 per
Directors own 11. 7 per cent common
Directors have about 10 per cent of
Pickands Mather & Co. own 9. 2 per cent
common; directors 3. 4 per cent
Kaiser Industries, owned by Kaiser
Lukens Steel
National Steel
Phoenix Steel
Pittsburgh Steel
common
U. S. Pipe & Foundry
Freeport
Wheeling Steel
cent;
Woodward Iron
percent;
American Metal Climax
Dodge
owns 79 per cent
Huston family owns 38 per cent
M. A. Hanna Co. owns 22 per cent, in-
siders 3. 5 per cent
Insiders own about 25 per cent common
Directors control about 21 per cent
Directors own about 2 per cent,
Sulphur 5. 7 per cent
Hunt Foods & Industries own 11. 1 per
cent; Cleveland Cliffs Iron 4. 8 per
directors 1 per cent
Woodward family holds about 15. 4
directors about 8 per cent common
Selection Trust owns 12. 2 per cent com
mon; directors 4. 2 per cent; Phelps
4 per cent
American Zinc, Lead & Smelting Consolidated Goldfields of South
Africa
Bunker Hill
Campbell Red Lake
Cleveland-Cliffs Iron
Detroit
Consolidated Mining
Copper Range
Great Northern Iron
Harvey Aluminum
Hudson Bay Mining
Inspiration Consol. Copper
Kaiser Aluminum
common
owns 61 per cent
Hecla Mining owns 9. 75 per cent common
Dome Mines, Ltd. , owns 57 per cent
Directors own about 5 per cent;
Steel 22 per cent
Canadian Pacific owns 51. 5 per cent
American Metal Climax owns 17. 5 per
cent; Blacton & Co. 12. 5 per cent
In trust for lifetime of 18 persons
Harvey family owns all Class B stock
Anglo-American Corporation owns 18 per
cent common
Anaconda Co. owns about 28 per cent of
Stock
Kaiser interests own 45. 2 per cent
Magma Copper
common
McIntyre-Porcupine Mines
Newmont Mining
common
Reynolds Metals
United Nuclear
Chemical
Vanadium
Calumet & Hecla
common
Continental Copper
Fansteel Metallurgical
General Cable
Howmet
com-
International Silver
Revere Copper & Brass
American Chain & Cable
Baker Oil Tools
common
Clark Equipment
per
Continental Motors
Foster Wheeler
Gardner-Denver
Halliburton Co
Ingersoll-Rand
Leesona
Link-Belt
Newmont Mining owns 80. 6 per cent
Shares closely held
Directors own more than 15 per cent
Directors, mainly members of Reynolds
family, control about 19 per cent
Olin Mathieson and Malinckrodt
Works own nearly 30 per cent
Directors control about 11 per cent
Directors control about 9 per cent
Directors Control 7 per cent common
Directors control 9 per cent of stock
American Smelting owns 36 per cent
Pechiney (France) owns 49 per cent
mon; directors control 8 per cent
Directors control 9 per cent common
American Smelting owns 34 per cent of
stock
December 17, 1965
W. T. Morris Foundation owns 17. 8 per
cent of stock; directors 3. 1 per cent
Directors hold about 16 per cent
Directors and families own about 12
cent of stock
Ryan Aeronautical owns about 47 per
Cent
Directors own 5. 7 per cent; Financial
General Corp. owns 13. 5 per cent
Directors represent 7. 1 per cent
Directors own about 8 per cent
Directors own 6 per cent common
Directors own about 17 per cent
Directors own about 6 per cent
McNeil
Mesta Machine
Outboard Marine
Rockwell Manufacturing
Symington Wayne
Textron
S. S. White
Brown & Sharpe Manufacturing
Carborundum
own
Cincinnati Milling Machine
cent
Giddings & Lewis
of
Kearney & Trecker
Norton
UTD of
Dr. Pepper
Royal Crown Cola
and
General Baking
common
United Biscuit
Ward Foods
stock
John Morrell
Campbell Soup
64. 3
Directors own 11 per cent
Directors own about 6 per cent common
Ralph S. Evinrude owns/controls 14 per
cent of stock
Rockwell family controls 19 per cent
Directors own 10 per cent
Directors own 6. 5 per cent common
Directors own about 6 per cent common
Henry B. Sharpe, president, and family
own 34 per cent of stock
Mellon family and related interests
about 21 per cent common
Directors and families own 21. 7 per
Common
Directors and families own 21 per cent
stock; Motch & Merryweather Machinery
10 per cent
Trecker family owns about 50 per cent
Officers and directors own 11 per cent
Common
Directors interested in 25. 3 per cent
Stock
Directors hold about 11 per cent
Directors hold 14. 6 per cent; Pickett
Hatcher Educational Fund 2. 9 per cent
Goldfield Corp. owns 51 per cent
Directors own 18 per cent of stock
Directors interested in 32 per cent of
Directors hold 18 per cent
Dorrance estate owns in trust about
per cent
Chock Full O'Nuts
con-
Consolidated Foods
Gerber Products
30
H. J. Heinz
cent
Hershey Chocolate
Hunt Foods & Industries
common
Libby, McNeill & Libby
common
A. E. Staley
Stokely-Van Camp
directors own
William Wrigley, Jr.
control
Eversharp
stock
Max Factor
Helene Curtis Industries
Revlon and
Pet Milk
Anderson, Clayton
Kellogg per
Pillsbury
stock
Bulova Watch
Hewlett-Packard
William Black, chairman and founder,
trols about 15 per cent common
Nathan Cummings owns 9. 4 per cent of
stock; Union Sugar 8. 2 per cent
Gerber family and directors own about
per cent common
Heinz family owns more than 37 per
Common
Milton Hershey School owns 66 per cent
of stock
Directors own about 7. 9 per cent
Foreign interests own 40 per cent
Staley family owns 60 per cent common
A. J. Stokely, president, and
or control 31 per cent common
Wrigley interests and directors
about 35 per cent common
Directors own about 15 per cent of
Directors own 99. 9 per cent common and
33. 5 per cent Class A shares
Directors own 53 per cent of stock
Directors own 99. 9 per cent Class B
11 per cent common
Leading stockholders own about 65 per
cent common
Directors control 48 per cent of stock
W. K. Kellogg Foundation controls 51
cent common
Directors control about 6 per cent of
Directors control 19 per cent
Directors own about 70 per cent
Polaroid
Tektronix
Alleghany
holdings
Pacific
General American Investors
Directors control about 25 per cent
Directors and officers own 57 per cent
Allan P. Kirby owns about 40 per cent
common in this company with big
in New York Central RR, Missouri
RR, Transamerica and Investors Diversi
fied Services
Directors own about 11 per cent common
Investors Diversified Services Alleghany owns 43 per cent voting
stock
The burden of proof has clearly been shifted in this chapter to those who contend that stock ownership and corporate control are widely dispersed among many small stockholders. All available evidence, direct and statistical, stands as an insurmountable barrier against the contention.
Any low percentages of participation in the foregoing list should not be taken as implying that they exhaust the concentrated interest. All they indicate is that this is the concentrated interest as shown under the rules of the SEC. In every single case, even where only a 5 per cent interest is shown, deeper inquiry would show, almost invariably, that far fewer than 1 per cent of stockholders owned the bulk of the stock or enough to give working control.
Even Fortune, after many years of surrender to the Berle-Means fantasy that ownership is divorced from control in most of the big companies, has now (June 15, 1967 ) come over to recognizing that the big owners have more than a little to say. What Berle-Means did. initiating the fantasy, was to confuse control with 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 big company in the case of the New York Central Railroad, the nonowning management walks the plank. In this case the big owners turned out to be the Young-Kirby-Murchison group.
"After more than two generations during which ownership has 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 family that holds onto the controlling interest and actively manages the affairs of a big company is regarded as a rare exception, as something of an anachronism. But a close look at the 500 largest industrial corporations does not substantiate such sweeping generalizations.
"In approximately 150 companies on the current Fortune 500 list, controlling ownership rests in the hands of an individual or of the members of a single family. Significantly, these owners are not just the remnants of the nineteenth-century dynasties that once ruled American business. Many of them are relatively fresh faces. In any event, the evidence that 30 per cent of the 500 largest industrials are clearly controlled by identifiable individuals, or by family groups, is something to ponder. It suggests that the demise of the traditional American proprietor has been slightly exaggerated and that the much-advertised triumph of the organization is 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 true that many are "relatively fresh faces," nearly all show strong ancestral resemblances or bear established ancestral names already mentioned many times in this book. They are heirs.
Fortune's list of 150 concerned only an individual owner or 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, control also rested with a small number of owners (as distinct from nonowning managers and many small stockholders): either multi-family ownership groups consisting of as many as five to seven families or individual members of a functionally related financial group. In no case, except when a company is under court-sanctioned trustees, can it be shown that ownership is divorced from control, although in many cases it is divorced from active management.
While taking cognizance of the Fortune article, and largely endorsing it as far as it goes, I, for my part, learned nothing from it that I have not known for thirty years. Its significance was not that it told something new but that it represented some open backtracking from the Berle-Means contention that ownership has been, or is being, divorced from company control and that full control rather than delegated management is being exercised by professionally trained nonowning managements.
What is most interesting--to me, at any rate--is why steps are now being taken to abandon, at least partly, the Berle-Means fantasy, which has been widely disseminated and has many quite distinguished followers. There was nothing inherently marvelous about the theory; what led to its being given wide currency was that it served to gull an always gullible public with the idea that property was losing its power and that something akin to socialism (but better) was evolving before our eyes. The United States was going to retain private property but at the same time it was going to have collective nonprofit-oriented, professional management in the corporations; if the owners, particularly the big owners, did not like this they would be powerless. As far as that went, big ownership itself was going out of existence.
In brief, this was a useful myth in manipulating restive public sentiment, particularly in the Depression and spectacular World War II. The idea that big stockholders were either impotent or vanishing was widely relished.
As I surmise, the myth is being abandoned precisely because of this depiction of the stockholders, particularly the big ones, as impotent. As a psychiatrist might say, the stockholders are shown in the Berle-Means script as castrates, displaced by bright young men tip from Swampwater College with nothing but technique to offer: know- how and can-do. Objectively serviceable though the myth has 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, the boss (which he is), the top owner-manager has had himself publicly presented as something of a corporate tabby cat. As the Fortune sample list of 150 shows, he is anything but this. He is, in fact, far more autonomous and far-ranging than any Soviet industrial commissar, who is always under the tight leash of the Communist Party. The commissar accepts policy; the big owners make or shape policy. They are not the puppets of nonowning corporate managers.
What must have happened in a general way, it seems to me, is that somebody grumbled about this constant depiction of stockholders as the pawns of puissant corporate officials who came from nowhere, and the grumbling was finally beard by the big ears up at Fortune. And now we see the beginning of the dismantling of what had become a sturdy myth, although quite a few academicians are still bemused by it and see something akin to socialism (only better) developing by gradual administrative fiat
promulgated by expert nonowning managers to whom profits are secondary, public welfare primary.
Seven
THE AMERICAN PLANTATION: A PROFILE
It has been abundantly shown that the members of a small coterie, comparable in relative size to the owning class of the Banana Republics and other unbenign polities, own and control all important economic enterprises in the United States. And now that we have a latter-day insight into the ownership and control of the individual parts, it remains to be shown into what whole these parts fit.