"The Nation's Marketplace" is a term frequently applied to the New York Stock Exchange. Is this just a fancy phrase or does the Exchange really serve as a market place for corporate America?
Let's take a look at what goes on at the corner of Wall and Broad Streets in lower Manhattan and decide for ourselves. There we will find a marketplace where each day people from every corner of the country send orders to buy and sell shares which represent an ownership interest in nearly all the leading corporations in the country. In this one place Americans have free access to an ownership stake in 1,100 corporations--companies which together earn about half of all the net profits after taxes reported by all United States companies, pay half of all the dividends disbursed, and provide jobs for more than 11 million workers.
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These companies produce three out of every four automobiles and trucks made in this country; ship about seven-eights of all the finished steel; produce three-quarters of all the electric power generated; handle more than 90 per cent of all the railroad traffic; fly nine out of ten domestic revenue passenger miles; and refine 90 per cent of all the oil produced.
The companies whose shares are listed on the Exchange clearly comprise a major part of the miracle of industrial America. And for the shares of these companies the New York Stock Exchange provides a fair, efficient and honest marketplace where the public can buy and sell securities at the fairest prices available--prices which reflect the public's offers to sell and bids to buy. The Exchange truly stands at the heart of the American free enterprise system. And its future is inextricably linked with the future growth and prosperity of our economy.
Because of its key position in our present day democratic capitalism, the Exchange is determined to do all within its power to strengthen and preserve that system. That is why the Exchange has fought long and hard against those provisions of our federal tax laws which have discriminated against investors and created barriers to the free flow of venture capital is our economy.
Congress has at long last recognized the inequitable tax treatment created by double taxation of dividends and has made a modest start toward removing it. We are hopeful that, as revenue considerations permit, further reduction in this unfair tax can be made. Of equal importance to the future soundness of our economy is much-needed revision of the capital gains tax, which has discouraged the flow of funds' from seasoned issues into new ventures.
Public Education
An adequate flow of new equity capital to American business is of vital importance to the future growth of our dynamic economy. If industry is to be supplied with the new funds it must have in the years ahead to create jobs, produce new and better products, and continue to raise our national standard of living, it will be essential to broaden the base of corporate ownership--to add to the rolls of American shareowners millions of financially able individuals who are not now owners of corporate stock. Mass investment will have to be added to our modern miracles of mass production and mass distribution.
The New York Stock Exchange has taken the lead in encouraging broader ownership of corporate stock. Under the theme "Own Your Share of American Business" we are attempting to educate the American public about the importance of equity capital in providing all of us with jobs, in making possible the production of new products devised by industrial research and in raising the standard of living of each and every American. We are pointing out the risks and rewards of common stock ownership as well as the need for adequate financial reserves and life insurance as prerequisites to investment. We are explaining the role of the Exchange in our economy and the services which our members render to investors.
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It is our goal to educate Americans to the point where they have a basic understanding of common stock investments--its importance to our country and its potential for them as an investment medium. Once Americans have a clear understanding of common stock investment we shall not lack equity capital, for millions of financially able Americans will decide that they too should own their share of American business.
Perhaps one of the greatest stops forward in the program to broaden the base of corporate ownership was taken during the past year with the introduction of the Monthly Investment Plan. This Plan is designed to permit a person to purchase stock out of income--by making regular purchases every month or every quarter. Under M.I.P., as we call it, a person can put as little as $40 a quarter into the stock of his choice. No credit is involved. The purchaser gets just what he has paid for--whether it is 5 shares or 1/5 of a share. We believe that the Monthly Investment Plan will become an integral part of the financial program of many Americans and will enable them to create for themselves, in an orderly and regular manner, an ownership stake in the future of America.
"The Market Place"
The principal role which the New York Stock Exchange is playing in today's economy is that of "The Nation's Marketplace," where Americans can freely buy and sell shares in our great corporations at prices openly arrived at in dealings with other investors. As long as it can meet the needs of investors for such a market its important place in our economy is secure. But beyond this primary function it has taken on a broader task--the encouragement of wider public ownership of our country's economic might--not public ownership through government but through individual investment in common stock by millions more financially able Americans.
A graduate of the Harvard Business School in 1934, Funston started his business career with the American Radiator and Standard Sanitory Corp., in 1936. Five years later he joined Sylvania Electric, but only briefly. In 1941 he was granted a leave of absence to serve as assistant to the Chairman of the War Production Board. Three years later, at the age of 33, Funston was named President of Trinity.
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