Evening star., 1949-07-08

q DT1ter knO1On TO Ihe Star 10 use
a nom de plume. Please be brief.
mans condemnation of the bill-with ap-
parent approval-as "blistering." We may
we'll suspect that the only blisters resulting
were on the Cardinals face-when he
saw the reaction of some of our more
courageous newspapers.
HOLTON r. SMALL.
Urges Organization of Stockholders
To Defend Their Legitimate Interests
To the Editor of The Star:
Private enterprise is threatened by power
full pressure groups and by legislation and
administrative rulings. Holders of over
So, 900 000.0 900 of securities of bankrupt rail-
roads were appropriated by the 1CC, ignor-
ing it's own valuation. Again the SEC wiped
Que 81 600, 100000 to s6,ooo,ooo,ooo Of market
value belonging to owners of holding COM
pany stocks. In neither case were these
stockholders or their representatives called
to hearings.
Furthermore, labor unions compel cor
porationS to adopt uneconomic wage poll
cies and have several times compelled presi-
dental emergency boards to reopen settle
ments that were not acceptable to the unions.
They are 100000 in number. And an
analysis of many companies shows that
about 80 per cent of the stockholders own
less than 100 shares. In large companies like
American Telephone, General Motors, United
States Steel and Pennsylvania Railroad,
very high percentage of the total number of
stockholders own less that $4,000 at aver
age value. The stockholders exceed the
workers in number in these and other
companies.
The workers acquired social and political
hy ,i1 b,,f fho
remain unorganized and have become help
less victims of organized groups. There is
no equilibrium or balance of forces. There
FORE our economy is in unstable and pre-
carious equilibrium.
Strength in Unity.
What is the remedy? Stockholders must
be organized. In union there is strength.
They have millions of votes and can ex-
ercise political influence. If the stockholders
were organized, would the ICC have con-
fiscated the owners of Junior securities in
railroad reorganiZations? Or would the
SEC have ignored such drastic losses on the
small owners of utility holding company
stocks through the enforcement of the un-
lust and destructive death sentence clause?
Stockholders unions could offset the pres
sure of organized labor on legislators or
administrative bodies The stockholders
union could depute to a special stockholders
committee the non-business problems Of
public relations, labor relations and Govern
ment relations.
Past efforts on behalf of stockholders have
had little result. Stockholders organiza-
tions arose spontaneously and remain small
and powerless. The reason for their failure
is that they were not organized functionally.
Labor unions succeed, because they are
grouped either around some craft, like the
AFL unions of carpenters, or around some
industry, like the CIO unions OF automobile
workers. The AFL and CIO would be as
feeble and ineffective as the investors Or
ganizations now are. if they went to workers
in general and asked for voluntary contri-
buttons to labor protective society to in
clude all crafts and all industries.
PENNSYLVANIA r. r. Precedent.
The Pennsylvania Railroad in l947 en-
couraged the formation of committee OF
stockholders Ito work with the management
on labor and Government matters. The
stockholders have direct responsibility and
can be more effective in presenting their
views to the press, members OF Congress and
regulatory bodies than through an organized
effort stimulated by management .. The
President on behalf of the management
stated that he considered it very desirable
to have the stockholders take such an in
terest" So read the secretary's letter to the
stockholders
Following the successful precedent Of
unions, the stockholders should be organized
first by companies, as United States Steel
General Motors, etc. Then these should be
united by industries, as steel, automobiles.
etc. Finally. the industry unions should be
in turn federated into national federation
of stockholders unions. The unions should
be financed not by voluntary contributions
but by a fixed charge on corporate income
There should be checkoff, similar to labor
union dues, of cent or more share or some
tiny fraction OF the pronts. lnls Is a leslCl-
mate business expense.
On the New York Stock Exchange and the
New York Curb, there are 1900 900 shares
listed. Dues of l cent a share would make
available $26, 900, 900 out of dividends totallng
about S4, 900 900 900 and market value OF
over $64 900 000, 900. The several present IN
yestors organizations have receipts from
voluntary contributions of between $4,000
and $4,000 and their efforts are therefore
feeble. But labor unions collected IN 1898
over 80,0o0,o00 and were notably enec-
tive in accomplishing their purposes.
Research Groups Could Help.
Stockholders unions should utilize the
services of scientific organizations like the
National Bureau of Economic Research, the
Twentieth Century Fund and the Brooklngs
Institution to assemble the facts. The red
Grafton of Stockholders Unions should lml-
tate the AFL in sponsoring radio forums 10
nresent the case of about ten million stock
holders in the forum of public opinion.
The aim of the stockholders organization
should be (a) to protect the stockholder
against organized minorities and pressure
groups, (b) to fight destructive legislation
and administrative rulings and to urge
remedial legislation and administrative rul.
ings, Co to preserve private enterprise ana
it's twin political freedom. cd to help labor
to develop social ethics and social CON
science, with full recognition OF responsibility
of the labor union officials to tner own
members to the community and to the en-
ployers, ie.. the stockholders.
stockholders unions could cooperate with
other interested groups on common problems.
For example, on the railroads, the stock
,..1aa.e, .,x,io.,S and the labor unions have