Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-10-03
Stock in 200 Large
Corporations Held
By Family Groups
S. E. c. Study Indicates
5000, 900 individuals
Have Holdings

SUCK valued at nearly 81 ,4UU,UUU,UUU,
three family groups-the Rockefel-
lers, Melons and the Du Points
have considerable influence, If not
control, over Is of the 200 largest
non-f financial corporations in the
United States, the Temporary Ma
tional Economic Committee was told
in report submitted yesterday by
the. Securities and Exchange Com
mission. The corporations covered
by the S. E. C. study account for
the bulk of the activities in this
country in the fields of manufac-
turing, mining, electric and gas util-
tiles, transportation and commune
cation.
In releasing summary, Senator
OMahoney, chairman of the T. N.
E. c., emphasized that the study
does not represent the views Of the
committee, since it has not yet been
passed on by that body. The COM
mittee is not trying to prove any
preconceived thesis" he said. ut
is only seeking the facts"
Thirteen family groups. of which
the Du Points, Rockefellers and the
MELONS are a part, have holding
valued at 50 700 600, 900, representing
8 per cent of the stock of the 200
largest non financial corporations in
the United States, according to the
S. E. C. report. Only ohe-half OF
the large shareholdings Of individ-
uals in these corporations are in the
form of outright ownership. The
other half is represented by trust
funds, estates, and family holding
companies.
Expand Influence.
Each large interest group shows
a strong tendency to keep its hold
ings concentrated in the enterprise
in which the family fortune origi-
mated" Senator OMahoney pointed
out in a statement summarizing
the S. E. C. study. However, many
large family interest groups have
greatly expanded their individual
sphere of influence through the &C
QUESTION of control over additional
enterprises by the corporations
which they control. In obtaining
this further control, such acqui-
sitions are financed mainly out OF
the undistributed profits Of the par
ent bodies.
In 40 per cent of the 200 largest
corporations, one family. or small
number of families, exercise their
absolute control because of owner
ship of the majority of the voting
securities, or working control
through ownership of substantial
minority of the voting stock. About
so corporations are controlled by
one or more other corporations.
Thus in only 80 per cent Of the
corporations does the small group
of dominant security holders fail
to appear.
The financial stake of officers
and directors in their own corpora
tions is relatively small, for they
own only per cent of the COM
mon stock and less than per
cent of the preferred stock of the
200 corporations. However. there
were 245 such officers and directors,
each of whom had more than a
million dollars worth of the stock
in his company This minor frac-
ton of all officers and directors &C
counts for 81 per cent of the aggre-
gate value of holdings Of officers and
directors. Usually these heavy stock
holders are members of the domi-
nant. or controlling, families.
The 20 largest shareholdings in
each of the 200 corporations &C
count, on the average, for nearly
one-third of the total stock. In the
average corporation the majority OF
the voting power is concentrated in
the hands of approximately l per
cent of the stockholders"
Though foreign investors hold a
substantial stake in the ownership
of the 200 corporations, they have
majority control of only one COM
pany, the report points out, the
Shell Union Oil Corp. Foreign in
vestors also have large holdings in
Allied Chemical and Dye Corp. and
the American Metals Co., Ltd. At
the end of 1887, foreigners held ST.
300 100000 of common, and $780,
600 900 of preferred stock of these
200 corporations.
Foreign working Control"
An officer of the committee, who
asked that his name be withheld,
stated that the S. E. c. report
showed that foreign investors held
enough stock in a number OF indus
tries supplying strategic war mate
rails to the United States to have
effective working control" over
these corporations.
BY this, he explained, he did not
mean that foreigners necessarily
owned a majority of the stock. But
in several companies they owned
enough stock so that by acting in
block they could have actual con-
troll.
He said he had not made a study
to determine whether foreigners had
actually exercised such control nor
had he learned the identity or ma
tionality of those who owned the
stock.
The foreign holdings which were
large enough to give working con-
troll, the committee officer said.
were in a number Of industries"
other than those mentioned by
name in the summary of the report
released to the press yesterday.
About 100000 Owners.
Based on the statistics contained
in the study, it is estimated that
about 100000 individual Ameri-
cans are owners Of corporation stock
"a smaller number than generally
believed. The average stakeholder
owns shares in three different stock
issues and two and half corpora
tons. Half of all the Nations
stockholders receive annual divi-
dends of less than 500. The S. E. C.
study estimates that about 500 900