Evening star., 1933-01-21
NEED FOR CLEAR CORPORATION
STATEMENTS IS EMPHASIZED
Reforms in Presentation of Public Reports
Have Been Proposed by New York
Stock Exchange. "
Special Dispatch to The star.

Special Dispatch to The star.
NEW YORK. January 21.-A Wall
Street banker remarked the other day
that he had persistently refused to pur-
chase the stock Of one Of Americas
leading industrial companies because
he could not make head or tail Of the
report annually published by this cor
poration. Mentioning the fact to an
officer Of the company. the latter re-
marked, We'll, I can't either.
It would be interesting to know Just
how many investors take the same at
titude and to what degree stocks OF
recognized worth are dtscriminated
against on the score Of q dimcult IN
terpretation Of their book values.
There have been 80 many different
forms Of setting up balance sheets that
even certified public accountants have
been known to be puzzled over them.
II this is the case, 1t is not to be won
dered at that the man In the street
gives np in despair when he attempts
to analyze figures in statements that
are sent to him at irregular periods.
Reforms Proposed.
Reforms In the method Of presenting
corporation statements -are being pro-
posed by the New York Stock Exchange
under pressure from stockholders, but
mainly because Of the fragrant manipu-
lation Of accounts that was disclosed
in the books Of the Kreuger companies
and Of other concerns that have gone
into receivership the past year, In
volving losses to investors Of hundreds
OF millions Of dollars.
I'm. l. "a AtryNA NJ rs
to which more attention should be
given and which corporations, whose
securities are listed on the Stock Ex-
change, should clarity at frequent in
tervals during the year rather than
annually. This has to do with the
items rejecting their liquid position.
They include cash ON hand, such as
time deposits, call loans or Short-time
loans and readily marketable securities.
The latter usually embrace United
States Liberty bonds and Treasury
notes Of short maturities, municipal
notes running of in less than q year,
railroad equipment trust certificates
and called bonds Of domestic corpora
tons; and also. In the past, the obli-
cations Of strong credit countries
abroad. Where dividend payments are
involved, it is important for stock
holders to know just how much Of re-
serve Of this sort Is available for a con-
tinuation Of dividend payments If cur
rent earnings are not sufficient to cover
the regular dividend disbursements.
Some Of the companies whose stocks
are listed indicate their cash and short
term investment position every three
months; usually when they make their
dividend announcements. OF these the
General Motors Corporation Is a con-
spicuous example. The stockholder OF
this concern IS informed quarterly just
how much cash and marketable securi-
ties are in the treasury, and the rela-
ton Of this to current liabilities. It
has been a great satisfaction to holders
Of General Motors securities to know
during the past year that, although
earnings have been poor, their COM
pany remains In a remarkably liquid
position and can pay dividends indefi-
nitely II that seems to be wise pol
icy for the management to pursue. The
Nash Motors Co. also makes q feature
Of exhibiting its current cash position
every three months. The latest, pub
lished few days ago, indicated cash
and marketable securities aggregating
about $1l.50 a share, with the stock
selling around $3.50 a share.
Other Statements.
On the other hand, some big COM
panies, such as the American Telephone
& Telegraph Co., while publishing
elaborate annual reports, do not dis
close during the year as much infor-
nation concerning their current posi-
ton as shareholders would like to see
At the end of 1881 the balance sheet
Of the telephone company showed cash
and temporary investments, available
for conversion into cash, of about
$3.50, 100000. This compared with ap-
proximately $419, ,0O0, 900 at the close Of
1880. Just what the amount was on
December 81. 1882, will not be known
publicly until the report of the COM
pany II issued in March. Shareholders
feel that it would be to their interest
to know, at least semi-annually, how
this and other companies stand with
respect to their current position. On
September 3, 1882, the United States
Steel Corporation reported cash and
Government securities of $130,000, 600
against about $157,00o,o0o at the end
Of 1881.
Under a new ruling by the Inter-
state Commerce Commission, the rail-