INTRODUCTION

Background.

Institutional investors' role----

Committee responsibility

Commission and OMB responsibility ---

Ownership reporting requirements

The nominee list ----

Summary of the new data and its significance.

Ownership concentrated in unnamed banks.

Part I: 30 top stockholders of 89 companies

Cede & Co.---

Concentration in New York bank trust departments..

The top of the pyramid.

Part II: Sole voting rights..

Bank voting power increasing---

Part III: Bank voting rights in broadcast companies-

Voting rights of five banks

FCC ownership rules..

Inadequate ownership reports.---

Part IV: Electric utility reports to the FPC.--

Nominees hide owners--

Bankers use nominees most..

The multiple levers of control..

Inadequate disclosure a recurring theme...

Information not included in the Institutional Investor Study report.

Inadequate information on corporate interlocks..

A case history -

Conclusions and recommendations..

Alternatives for readjusting corporate power

Disclosure is the prerequisite..

Stockholders face obstacles.

Oversight needed...

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PART I

LEADING STOCKHOLDERS OF MAJOR AMERICAN CORPORATIONS IN 1972

BASED ON RESPONSES TO AN INQUIRY OF SENATOR LEE METCALF TO

324 CORPORATIONS, BY JUlius W. ALLEN

I. Introduction...

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II. Scope of Inquiry --

III. Summary Tables

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IV. Industrial Corporations.

A. Oil companies

Mobil Oil Corporation.

Atlantic Richfield Oil Company -

Continental Oil Company---

Ashland Oil, Inc.-----

B. Other industrial companies---

Ford Motor Company -

General Electric Company.

Chrysler Corporation.

Westinghouse Electric Corporation.

RCA Corporation ----

Union Carbide Corporation.-

Kraftco Corporation.

Litton Industries.

Caterpillar Tractor Company -

Monsanto Company -

Dow Chemical Company

United Aircraft Corporation..

Xerox Corporation...-

R. J. Reynolds Industries.

Bendix Corporation..

Textron.--

CPC International.--.

Warner-Lambert Company -

Raytheon Company -

V. Transportation Companies---

A. Airlines

United Air Lines

American Airlines ---

Pan American World Airways.

Northwest Airlines---

Braniff Airways..

Western Air Lines

Pacific Southwest Airlines..

North Central Airlines..

Frontier Airlines.--

B. Railroads.----

Penn Central Company-

Burlington Northern.

Norfolk and Western Railway-

Chesapeake and Ohio Railway--

Seaboard Coast Line Industries..

Southern Railway-

Missouri Pacific Railroad.--.

Chicago, Rock Island and Pacific Railroad.

Chicago Milwaukee Corporation...

St. Louis-San Francisco Railroad..

Rio Grande Industries --

Kansas City Southern Industries. -

Soo Line..

Reading Railroad.

Gulf, Mobile and Ohio Railroad...

C. Other transportation companies.-

Seatrain Lines.-

Spector Industries.

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VI. Public Utilities.--

A. Communications.--

· American Telephone and Telegraph Company-----

General Telephone and Electronics Corporation...

Continental Telephone Corporation..

Western Union Corporation.

B. Electric and gas utilities..--

American Electric Power Company --

Virginia Electric and Power Company.

Texas Eastern Transmission Corporation..

Texas Utilities Company -

American Natural Gas Company ---

Niagara Mohawk Power Corporation.

Northeast Utilities..

Pennzoil Company -

Baltimore Gas and Electric Company---

Allegheny Power System..

Transcontinental Gas Pipe Line Corporation.

Pennsylvania Power and Light Company--

Long Island Lighting Company.

Potomac Electric Power Company.

Pacific Power and Light Company.--

Cleveland Electric Illuminating Company--

VII. Retail Trade..---

Safeway Stores..

Gamble-Skogmo.

Grand Union Company

R. H. Macy and Company -

Interstate Stores.

Cook United.---

Melville Shoe Corporation...

Pueblo International..

VIII. Banks.

First National City Corporation

Chemical New York Corporation.-

Bankers Trust Company (New York).

First Bank System (Minneapolis)

Republic National Bank of Dallas.

Girard Bank...

First National Bank in Dallas ---

Citizens and Southern National Bank..

Shawmut Association.--

IX. Life Insurance Companies...

Travelers Corporation.

X. General Observations.--

A. Information disclosed..

B. Confidentiality ---

C. Bank holdings..

D. Cede and Company -

XI. Conclusion....

Addendum-Nominee Accounts--An Introductory Explanation.

Tables:

1. Size Range of Corporations from which Stockholder Data were

Requested.---

2. Summary of Information Supplied in Response to Request for

30 Largest Stockholders.

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Tables Continued

3. The Largest Stockholders of 132 Companies in 1972 as Reported Page

by Respondents to Senator Metcalf's Letter.

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4. Holders of 2 Percent or More of Voting Stock in Three or More

of 89 Fully Reporting Companies..

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5. Eight Institutional Holders of Two Percent or More of Voting

Stock in Ten or More of the 89 Reporting Companies with

the Percentage of Voting Stock Held in These Companies

in 1972.-.

6. Summary of Stockholder Data Supplied by 89 Respondents

Supplying Data on 30 Largest Stockholders in 1972.

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7. Industrials-oil companies.---

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8. Industrials—other industrial companies.-

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9. Transportation-airlines.

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10. Transportation-railroads.-

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11. Transportation-other transportation companies

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12. Public utilities—communications..

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13. Public utilities-electric and gas utilities -

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14. Retail trade-

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15. Banks.-

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16. Life insurance.

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PART II

THE NEED FOR DISCLOSURE REGARDING CONCENTRATION OF Voting Rights

AMONG INSTITUTIONAL INVESTORS, BY PROFESSOR ROBERT M. SOLDOFSKY

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Objectives

Data Base

The Institutional Investor Study Stock Sample..

The Special Securities and Exchange Commission Tabulation

Bank Data Unique-----

Totals As Estimated From Institutional Investor Study Sample --

Desirability of Disclosure of Concentration Above One Percent.-

1. Price Effects of Concentrated Holdings...

2. Liquidity Effects of Concentrated Holdings.-

3. Public Right To Know and To Have Ready Access to Such

Information..--

Information Sources..

Bank Reporting Inadequate---

Self-Dealing and Conflicts of Interest Related to Non-

disclosure..

Antitrust Example Related to Nondisclosure.

4. Extent of Portfolio Concentration by Individual Financial Insti-

tutions and Groups of Institutions..

Inter-Related Financial Dealings.

Sharp Increase in Concentration.

Level of Presumptive Control..

FCC Eased Rule for Banks..

5. Disclosure of Portfolio Concentration in the Same Industry by

One or a Few Institutions....

Concentration in Airlines.

Holdings Should Be Public...

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Desirability of Disclosure-Continued

6. Special Problems That Might Exist or Develop in the Broad- Page

casting and Publication Industries....

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Broadcast Company Data Inadequate.

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7. Uniformity of Treatment of Financial Institutions.

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Review of Portfolio Concentration-Limits Appropriate --- 152

8. Future Growth of Individual Portfolio Concentration, and In-

dustry and Overall Concentration Levels.

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Arguments Against Limitation..

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Arguments For Limitation --

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The Reasonableness of the One Percent Level for Public Disclosure... 154

Reporting No Burden...

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Full and Partial Voting Rights.----

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Banks Generally Vote All Stock One Way.--.

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Portfolio Concentrations Covering Two or More Competing Com-

panies..

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Airline Holdings by Banks ---

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Debt, Control and Interlocks.

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1966 Institutional Ownership Pattern..

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Insurance Industry Holdings by Banks.

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Bank-Insurance Company Relationships.

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Holdings Can Be Adjusted Downwards.

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Long-Run Growth of Institutional Stock Holdings

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Growth Paths Projected..

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Institutions May Administer Half the Stock by 1980.-.

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Conclusion.

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PART III

HOLDINGS OF 25 LARGEST BANK TRUST DEPARTMENTS

INDUSTRY AND ANALYSIS OF BANK Stock HOLDINGS

COMPANIES

IN BROADCAST

IN BROADCAST

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Letter from Chairman Dean Burch to Senator Metcalf, October 6, 1972,

regarding banks holding stock in broadcast companies.

Letter from Vic Reinemer, staff director, Subcommittee on Budgeting,

Management and Expenditures, to Chairman Burch, August 22,

1973, regarding voting rights of banks holding stock in broadcast

companies.----

Letter response from Chairman Burch to Senator Metcalf, September 12,

1973.-.

Bank Stock Holdings in Broadcast Companies, an analysis of the FCC

data by Congressional Research Service, Library of Congress, Janu-

ary 9, 1973..

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PART IV

THE TOP 10 STOCKHOLDERS OF 209 ELECTRIC UTILITIES—A STAFF

ANALYSIS OF OWNERSHIP REPORTS FILED WITH THE FEDERAL

POWER COMMISSION.

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APPENDIX A

REPORTING REQUIREMENTS AND DISSEMINATION OF INFORMATION

ON CORPORATE OWNERSHIP AND STRUCTURE

Letter from Senator Metcalf to Comptroller General Elmer Staats,

February 9, 1973..

Letter from the Comptroller General to Senator Metcalf, April 10, 1973.