Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-21
FLOATING SUPPLY
OF STOCKS SMALL
Figures Show Number of In
veStors in Leading Firms
Has Grown.
Special Dispatch to The star.


NEW YORK, March 21.-One reason
for the resistance of the stock market
10 unfavorable news and its responsive
ness to any increased buying is the rel
atively small floating supply of the
principal stocks. In the first place. the
investment trusts, particularly those of
the so-called fixed type, have been tax
ing out OF the market the shares they
have contracted to carry in their port
folios. In the second place, there is q
steady stream of small buying orders
for cash which has depleted the market
supply.
This latter phase Of the matter is
illustrated by the increase in the num-
Der of stockholders which the leading
corporations report. 1t has often been
commented upon that the number of
shareholders in United States Steel in
creases as the stock depreciates in mar
ket price and vice versa. The average
small investor is willing to bay Steel
common when the price is low in dol
lars per share, regardless of the flnan-
cial or economic outlook, and he gener-
ally sells when the price advances, also
regardless Of fundamental conditions
Curiously enough he has Jared well by
following this program, much better
than some of the supposedly more
astute large traders.
Recent increases.
1t is therefore interesting to note that
as of December 81, last, the latest date
for which information is available at
this writing, the United States Steel
Corporation had 189,990 shareholders,
compared with 167,951 on December 81,
1929. The other day General Electric
in its annual report announced that its
stockholders numbered 1850 at the
close of last year against 60.374 at the
end OF the preceding year, an increase
Of 80 per cent.
This increase was accomplished IN
a year not only of stagnation in trade
but Of declining prices for stocks. Gen
eral Electric had % per cent less
orders during 1880 than during 1929
and untitled orders at the close Of the
year were down Al per cent from where
they were II months earlier and yet
the number of shareholders almost
doubled.
The same story is told by the records
of the General Motors Co. That
corporation mailed dividend checks for
the first quarter of 1881 to 286,000 ad-
dresses compared with 100000 at the
end of the first quarter of 1880 and
10000 at the end of the first quarter
Of 1929. Apparently the public has
faith in the motor industry no matter
how skeptical the market operator
may be.
Oil Group.
One more illustration will suffice.
The oil industry has suffered as much
or more from the unfavorable business
condit' ons as any other, and on top
of all of this has had to confront over
production on a huge scale. Market
SPECTATORS have been and still are
bearish on oil securities. and yet on
November Is, 1880 Standard of New
Jersey had Ill 952 shareholders, while
on the same date in 1929 there were
only 92,753 owners of the same stock.
Who then is right? Is the small in
weston a better judge of values. or is
he only giving tangible evidence of his
faith in eventual recovery, which re-
covery must be reflected in the market
price of the stocks of the leading corp
orations sooner or later? The answer
to these questions might prove helpful
to those spectators who have been so
freely selling other peoples stock for
the past IL months.
(Copyright, 1919