EXPLANATORY NOTES Net Change in Corporate Securities Issued Estimates of net cash flow in securities are derived by deducting from the amount of estimated proceeds received by domestic corporations through the sale of securities the amount of estimated payments by domestic corporations to investors for securities retired. The figures on total new issues of securities are based on the corporate offering series (appearing on earlier pages of this Bulletin), with certain adjustments. For instance, sales of stock to employees are included, whereas such sales are not covered in the corporate offering series, and a deduction is made from the original data for foreign issues sold in the United States. Also an adjustment is made to deduct from the total offerings the amount of issues which, although they were offered for sale, were not actually sold. The series on retirements covers the same types of issues as in the offerings series, and includes issues retired with internal funds as well as with proceeds from new issues sold for refunding purposes. The series is formed chiefly from individual records of each security issue retired through a cash transaction. The individual records are compiled from announcements appearing in the financial press and statistical services, and are supplemented by data for companies which are required to file periodic reports with the Commission. The figures are not all-inclusive, but is is believed that the amount of issues omitted is small in relation to the volume covered. It is probable that the deficiencies in the series are of less significance in the post-war period than for earlier years. Certain types of transactions not included in the offerings statistics are unknown sales, such as small private placements, and issues exchanged for assets or other securities of the same type. Furthermore, new issues do not usually include entrepreneurial capital used in forming new firms without resort to outside securities financing, nor is the liquidation of small firms usually included in the retirement data. Purchases of own company stock for servicing options or thrift plans are not treated as retirements. It is probable that many small retirements of small companies may be omitted. To some extent the volume of new issues omitted is compensated by the volume of retirements omitted. It should be noted that the series omits exchanges and defaults unless they involve cash payments. An exception is made in the case of conversions or exchanges of one type of security for another, such as debentures converted into common stock,which are included in issues and in retirements to the exter' known. Although this results in inflated individual totals for issues and retirements, the net cash flow is unaffected, and more accurate data for net debt issues and net stock issues result. FOREIGN SECURITY ISSUES SOLD IN THE UNITED STATES The accompanying tables detail certain securities transactions in the American capital market by foreigners. Included are all issues registered with the Securities and Exchange Commission for sale to the American public, and also issues placed privately with a sample of American life insurance companies who voluntarily report their private placements to the Commission. In private placements, only the portion of the issue which is actually reported as taken down is included in the figures. American Depository Receipts are not included, nor are secondary offerings. Issues by enterprises which are either wholly or partially state-owned but which operate in the transportation industry are entered on the tables as corporate securities and are noted with an asterisk (*). The two-letter code used to identify the country of origin of each security was developed for the National Bureau of Standards by the Department of State. A summary of these codes is included with the tables; more detailed information can be found in "Federal Information Processing Standards Publication 10", available from the Superintendent of Documents, Washington, D.C. |