Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-10
BUSINESS SECRECY
TO Be ABANDONED
Corporations Expected to Re.
veal Plans and Prospects
to Stockholders.
BY J. O.. ROYLE.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, November g. Stock
and bond holders in American opera
tions will flnd ut their disposal more
complete and frequent information as
to the status Of their companies in the
next year than ever before. This Is be-
ing brought about rapidly by the up
heaval In stocks, bonds and commodity
prices on the various exchanges. Some
concerns have already adopted the
policy and men prominent in financial
affairs, especially those connected with
exchanges as officials, with banks, and
with State and Government regula-
tory bodies, are furthering 1t to the ut
most.
The trend was strikingly shown dur
ing the Fall in values on the New York
Stock Exchange by the action of the
president of q concern engaged in
handling food products and backed by a
banking house which has hitherto al
ways followed Q policy Of silence con-
corning its own affairs and those Of the
corporations 1t has sponsored.
More Information Promised.
This statement said in part: "A deb
acle has occurred In the stock market.
Our security, in common with the gen.
eral list. has been swept down TO o point
where it yields the investor approx
mately ia per cent share. This ire
mendous reduction In market values eff
fects every one Of us and even the most
conservative are apt to be influenced
by the voice of panic. You are entitled
to be treasured with regard to your
corporation" After outlining ths con-
dillon Of the company the statement
continues: I'VE are facing the future
with implicit confidence.
The communication declares In con-
ciusion that 1t Is the belief of the COM
pany that the annual report does not
keep stockholders informed frequently
enough rs to- conditions, as too much
history u written in Q business year to
make complete annual report praeti-
cable. 1t VIII be the policy OF the COM
pany in future to inform stockholders at
briefer periods as to the state Of the
corporation.
The president Of q great oil company
said to his stockholders: II know OF
nothing In the future of the oil industry
which justified the extraordinary de-
probation Of oil stocks today. No new
conditions have arisen threatening cur
company or, so far as know, the in
dustry. On the contrary, the prospect for
effective conservation which will result
in balancing production with demand Is
brighter today than 1t has been at any
time" This company is backed by in
terestS to when in the past silence has
been fetish.
other corporations are laying their
cards face up ON the table. The Salu-
tary effect of this policy has been
shown in the volume of buying for long
pulls by both large and small investors,
despite the unsettlement which has pre-
vailed in the markets.
Other Interests Follow Suit.
The policy is finding special favor
with tbs public utility companies who
have stressed the customer ownership
idea, The investment trust are follow
ing suit and for the firSt time, the
holders of many of the investment
TRUST stocks are getting real idea OF
what Is being done with their money.
This should not be taken to indicate
that information was withheld or con-
cealed. Many of the investors in such
stocks have not had q complete knowl-
edge of just what an investment trust
Is or how it operates.
The progress Of mergers in many lines
has Been checked materially by the re-
adjustment of stock prices. Many OF
the mergers have been planned on
basis of exchange of stocks. Negotia-
tions can no longer be carried on with
present market values Is . basis. AL
exchanges of securities must be worked
out on q new basis, which takes time
and is Intellectual until the markets
In analyzing the effect of the recent
securities market developments, respon-
sibiIity for holding the situation from
getting entirely out OF hand and de-
Veloping into a panic winch would
have made the famous black Friday
look like bright Spring day, has been
yario,lsly placed. The Federal Reserve
system Is given credit. So are the
New York banks. The action of a
great industrial corporation in de-
claring an extra dividend is held a
factor But there is small doubt that
matters would have reached much
more serious stage had it not been
for the developments In communication.
Part Played by Air Mail.
The movement Of cash, checks and
securities by air mail reached record
he.eaking heights in the last fortnight.
Traders were protected instead OF be-
ing wiped out entirely because 1t was
possible to reach them quickly by
mail, telegraph and telephone. The
long,distance calls made established
records for both expense number and
distance. Investors abroad were al
most as readily reached as those at
home. The cables and land wires
carried a huge volume of important
business dispatches and large sums were
transmitted by wire.
Executives whose presence was re-
CURED at certain points were able to
reach those points more quickly than
ever before In history. The members
OF the Federal Reserve Board in WASH
ington and IL other districts might just
as well have been sitting in the board
room Of the Federal Reserve Bank of
New York, SO far as being In close