29-146 O 4. F49:St6° STOCKHOLDERS INVESTMENT ACT OF 1974 HEARINGS BEFORE THE SUBCOMMITTEE ON FINANCIAL MARKETS OF THE COMMITTEE ON FINANCE UNITED STATES SENATE NINETY-THIRD CONGRESS SECOND SESSION... ON S. 2787 AN ACT TO AMEND THE INTERNAL REVENUE CODE OF 1954 S. 2842 AN ACT TO PROVIDE FOR THE CONTINUING AVAILABIL- For sale by the Superintendent of Documents, U.S. Government Printing Office CONTENTS Callaway, Samuel R., executive vice president, Morgan Guaranty Trust Chrysler Corp., Lynn Townsend, chairman of the board, accompanied by: Corcoran, Thomas G., senior partner, Corcoran, Foley, Youngman & Rowe_ First National Bank of Chicago, Howard E. Hallengren, vice president, trust department, accompanied by: Benjamin Homola, vice president, legal division, trust department__. First National City Bank, George M. Lingua, senior vice president.... Georgetown University Law Center, Prof. Roy Schotland_. Hallengren, Howard E., vice president, trust department, First National Bank of Chicago, accompanied by: Benjamin Homola, vice president, legal division, trust department_. Janeway, Eliot, political economist and president, Janeway Publishing Lingua, George M., senior vice president, First National City Bank_ Morgan Guaranty Trust Co., Samuel R. Callaway, executive vice presi- Needham, James J., chairman of the board, New York Stock Exchange, Donald L. Calvin, vice president, New York Stock Exchange; and Dr. William C. Freund, vice president and chief economist, New York New York Stock Exchange, James J. Needham, chairman of the board, Donald L. Calvin, vice president, New York Stock Exchange; and Dr. William C. Freund, vice president and chief economist, New York Richmond College of City University of New York, Dr. Edward Malca_. Schotland, Roy, Prof., Georgetown University Law Center___ Securities Industry Association, John C. Whitehead, chairman, governing council, accompanied by: Leon T. Kendall, president, Securities Indus- 105 169 143 257 143 Townsend, Lynn, chairman of the board, Chrysler Corp., accompanied by: William G. McGagh, assistant treasurer, Chrysler Corp__ Whitehead, John C., chairman, governing council, Securities Industry Association, accompanied by Leon T. Kendall, president, Securities In- Augenblick, Robert L., on behalf of Investment Company Institute_ Dorr, Russell H., McLean, Va__- Investment Company Institute, Robert L. Augenblick_. 322 126 335 326 322 331 335 126 332 Morgan Guaranty Trust Co., Samuel R. Callaway, executive vice president_ National Shareholders Association, Hans Randolph Reinisch, president_. Poser, Norman S., American Stock Exchange, Inc‒‒‒‒. 333 332 363 335 Reinisch, Hans Randolph, president, National Shareholders Association__ 333 312 Tarver, Norman H., Toronto, Canada---- 340 Ture, Dr. Normal B., on behalf of the Committee of Publicly Owned Com- ADDITIONAL INFORMATION Submissions by: Bentsen, Hon. Lloyd, a U.S. Senator from the State of Texas: Floor statement-S. 2842_. Morgan Guaranty Trust Co. of New York, trust and invest- STOCKHOLDERS INVESTMENT ACT OF 1974 TUESDAY, FEBRUARY 5, 1974 U.S. SENATE, SUBCOMMITTEE ON FINANCIAL MARKETS The subcommittee met, pursuant to notice, at 9:35 a.m., in room 2221 Dirksen Senate Office Building, Senator Lloyd Bentsen (chairman) presiding. Present: Senators Bentsen and Bennett. Senator BENTSEN. Ladies and gentlemen, the committee hearings will come to order. We are obviously complying with the President's recommendations on temperature controls, saving some energy this morning. Our first witnesses will be Mr. Roy Schotland and Dr. Edward Malca. Mr. Schotland, Dr. Malca, would you gentlemen please come forward and be seated there? This morning the Financial Markets Subcommittee is going to resume its hearings. We will receive testimony on S. 2842, the Stockholders Investment Act, which I introduced on December 20, 1973, as a result of the hearings that we had preceding that. Now, this bill would place some limits through our tax laws on the degree to which managers of pension funds and that is only totally discretionary funds can concentrate their investments; and, in addition, this bill would provide tax incentives to the small investor, to hopefully encourage him to come into the stock market. It is my feeling that this legislation is necessary for several reasons. First, the limitations on pension fund managers such as I propose would result in greater diversification of pension investments. It is my feeling that these are not onerous limitations. Subcommittee surveys indicate that the majority of pension fund managers already comply with limitations such as these. But there are aberrations on the part of some managers that could lead to abuse and to serious problems. These kinds of limitations would spread available capital to a larger number of corporations and, in addition, provide safety to the future retirement benefits of more than 30 million Americans who participate in private pension plans. Second, the tax incentives to encourage individual investment in the stock market I feel are very much needed these days to help industry raise the capital that is needed for business expansion for the future. (1) |