The Stock Exchange And Corporations

Corporations listed on the Exchange provide jobs for more than 11 million workers. These companies produce practically all the automobiles and trucks made in this country, ship about seven eighths of all the finished steel, produce three quarters of all the electric power, refine 90 per cent of all the oil produced, and handle 95 per cent of our railroad traffic and air passenger travel.

The list of Stock Exchange securities has grown with the country. Up to 1869 listing on the Exchange was a highly informal action. In that year the Stock Exchange laid down its first requirement for listing-that it be notified of all stock issued and valid for trading. In the following years the Exchange added more requirements, including frequent earnings reports, full and prompt disclosure of changes in property or business, and maintenance of securities transfer offices.

The philosophy behind the Stock Exchange's listing requirements is simply this: The investor or trader who owns, buys or plans to purchase listed securities is entitled to information about the corporation which will help him to make his investment decisions intelligently.

At the time a company qualifies for listing on the Stock Exchange, it must be a going concern with substantial assets and demonstrated earning power. The Exchange places greater emphasis on such considerations as degree of national interest in the company, its standing in its particular field, the character of the market for its product, relative stability, and position in its industry.

The company's stock should have a sufficiently wide distribution to offer reasonable assurance that an adequate auction market in its securities will exist. The company should show earnings of at least a million dollars in the preceding year and should have at least 1,500 stockholders, holding among them at least 300,000 shares. Concentrated holdings are not considered in applying this standard.