Where the Big Blocks Are

Way back in 1932, Adolf A. Berle and Gardiner C. Means showed in The Modern Corporation and Private Property that one can control a corporation by controlling even a minority of its shares. Hence it is no surprise that today's institutional investors--bank trust departments, pension funds, insurance companies and the like--exert great influence over companies and securities markets. Just how concentrated, however, is such influence? In 1975 Congress ordered the SEC and other regulatory bodies to supply it with new information on who owns what. Armies of lawyers descended upon the capital, arguing that such disclosure would be costly and difficult, and so far only one agency (the ICC) has compiled a report.

But Montana Democratic Senator Lee Metcalf asked Senate Aide Victor Reinemer last June if he could not do better. With the help of two assistants and a research firm called Corporate Data Exchange, Reinemer dug through tons of information, most of it on the public record, involving 122 major corporations. Last week the study was published. Of the firms, 56 either had more than 5% of their shares voted by a single institutional investor, had more than 10% controlled by five or fewer such investors, or had 10% owned by a single family. Among the top five stockholders in each of the 122 companies, twelve investors showed up more than half the time. New York's Morgan Guaranty Trust was the No. 1 stockholder in 27 corporations. Morgan, Citibank, Chase Manhattan and other top investors also appeared as the principal shareholders in each other.

Morgan Guaranty was quick to respond. Said a spokesman:

"Where are the examples of abuse?" Indeed, the study shed a lot more light on the extent of stockpower concentration than on its effects, good or ill.

Investor votes

Morgan Guaranty Trust

Citibank

Teachers Insurance & Annuity

Capital Research & Management

Prudential Insurance

Dreyfus Corporation

National Bank of Detroit

Kirby Family Group-Allegheny Corp.

BankAmerica Corp.

Fidelity Management & Research Corp.

Manufacturers Hanover

Bankers Trust

First National Bank of Chicago

Lord, Abbett & Co.

Equitable Life Assurance

First National Bank of Boston

Harris Trust & Savings

Chase Manhattan Corp.

Continental III. Natl. Bank & Trust

No. companies in which it has the most stock

27

No. companies in which it is among the top five stockholders

56

25

24

19

18

17

17

16

15

13

12

11

11

11

10

10

10

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