While the number of stockholders has been increasing, the average holdings of each stockholder have been steadily decreasing, and now average ninety-eight shares. The stocks of the United States Steel Corporation are great favorites among small investors. Taking the stockholders' list, it was found that among one hundred people, chosen at random, only nine own one hundred shares, or over, of both preferred and common stock, while forty-seven have less than ten shares each.
It is highly desirable that corporations should not only keep their old stockholders, but should attract new ones. The surest way to accomplish this end is to treat stockholders with the utmost frankness. Although considerable publicity is already given to the affairs of the larger corporations, further publicity is desirable. The average stockholder does not as a rule understand a balance sheet, and has only the vaguest idea of his company's affairs. So long as dividend payments are maintained, he is content. To be sure, a stockholder can always get an impartial and valuable opinion from an investment banker concerning the past records and future prospects of any company, but it would be well if the annual reports of boards of directors to stockholders contained material from which the investor could judge for himself to a greater extent. The material included should show the records of the company over a period of years, for the company's achievement in any one year may be unnecessarily discouraging, or fictitiously encouraging. These records are most easily understood when put in graphic form. With such graphic presentations any stockholder can learn instantly how the fiscal year under review compares with the several years preceding.
The American Telephone and Telegraph Company have for several years shown on the back cover of their annual report a chart like Fig. 249 portraying the growth in their business. Fig. 2 also appeared in an annual report of the same corporation to give a clear conception of what becomes of the company's revenue.
Though Fig. 1 has not been used in any annual report, it shows a type of chart which could very readily be included in a financial report to give complete facts to stockholders regarding complex conditions on which the average stockholder would gather very little information from the kind of corporation financial report ordinarily sent to him.
The railroads have used charts in their annual reports to a greater extent than the industrial corporations. Some of the railroad charts, however, are not put up in such form as to be easily understood and,
