Business: The Rise of Stockholders

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U.S. corporations mailed out $833 million in dividend checks to their stockholders in October, the Commerce Department reported last week, a record for the month and $13 million above the $820 million paid out in the corresponding month of 1958.

The total number of U.S. stockholders receiving such handy budget balancers is also at a new high. The latest New York Stock Exchange study showed 12,490,000 individual shareholders of record, up from 8,630,000 in 1956. The number of stockholders is now bigger than the number of factory workers. One in every four U.S. households gets a dividend check or checks v. one in seven only seven years ago. To keep the checks going, U.S. corporations are declaring dividends at a rate approaching $14 billion a year, against $9 billion in 1952.

Besides those who directly hold shares in corporations, there are nearly 4,000,000 mutual fund and other investment company shareholders who indirectly own a piece of U.S. industry. Added to these are millions protected by corporate pension funds, which last year bought 30% of new stock issues. The United Mine Workers' welfare and retirement fund holds nearly $4,000.000 in common stocks, gets over $195,000 in dividends.

Despite the rising popularity of shareholding, the new army of dividend receivers suffers from serious disadvantages compared with former years. For one thing, it costs more and more to get on the dividends list. From 1950 to 1959. rapidly rising stock prices cut the average yield to a new buyer of the stocks in the Dow-Jones industrial average from 6.63% to 3.14%.