Appendix III identifies by name the registrant and indicates the aggregate dollar amount of the proposed offering involved in the case of each registration statement as to which stop orders, consent refusal orders, and withdrawal orders were issued during the year.

A total of 1,275 amendments to registration statements were also filed during the past fiscal year requiring examination by the Commission. The corresponding number of amendments filed during the 1938 fiscal year was 1,815.5

There were also filed during the year a total of 172 annual reports and 66 amendments thereto by certain registrants pursuant to Section 15 (d) of the Securities Exchange Act of 1934, as amended, requiring examination. These figures compare with figures for the previous fiscal year of 150 reports and 62 amendments to reports.

In addition, the following figures show the volume of certain supplemental prospectus material filed during the past fiscal year under the Securities Act of 1933: (1) 328 prospectuses were filed pursuant to Rule 800 (b) which requires the filing of such information within 5 days after the commencement of the public offering; (2) 244 sets of supplemental prospectus material were filed by registrants to show material changes occurring after the commencement of the offering; and (3) 413 sets of so-called 13-month prospectuses were filed pursuant to Section 10 (b) (1) of the Act. Thus during the past fiscal year there were filed in the aggregate 985 additional prospectuses of these 3 classes.

At the same time, 259 supplementary statements of actual offering price were filed as required by Rule 970; and there were 41 instances where registrants voluntarily filed supplemental financial data.

During the fiscal year ended June 30, 1939, registrations for $2,494,000,000 of securities became effective under the Securities Act of 1933. This compares with a total of $1,912,000,000 for the previous fiscal year and $4,687,000,000 for the fiscal year ended June 30, 1937. Of the total of $2,494,000,000 of securities registered during the fiscal year ended June 30, 1939, $2,052,000,000 was proposed for sale by issuers. Approximately one-half, or $1,008,000,000, of this amount represented issues of electric and gas utility companies. Manufacturing companies with $575,000,000, or 28 percent of the total, were next in importance. Securities of financial and investment companies totalled $309,000,000, or 15 percent of the total. These three major industry groups thus accounted for all but about 8 percent of the total.

These amendments include 873 classed as "pre-effective" and 402 as "post-effective," and do not take into account 463 others of a purely formal nature classed as "delaying" amendments. 'Adjusted figure.

Adjusted figure.

'In addition to these issues, there were effectively registered during the fiscal year ended June 30, 1939, approximately $85,000,000 of reorganization and exchange securities as well as the guarantee of one issue. In the preceding fiscal year registrations of reorganization and exchange securities covered securities valued at $193,000,000 as well as the guarantee of one issue.

Approximately three-fourths of the effectively registered securities proposed for sale by issuers consisted of fixed interest-bearing securities which aggregated $1,581,000,000. Included in this total were $907,000,000 of secured bonds, or 44 percent of the total, and $674,000,000 of debentures and short term notes, or 33 percent of the total. Common stock ranked next in importance among the various types of securities with $191,000,000, or 9 percent of the total, followed by certificates of participation with $168,000,000, or 8 percent, and preferred stock with $112,000,000, or almost 6 percent. Thus all equity financing combined amounted to slightly less than one-fourth of total registrations.

A detailed breakdown of the registration statistics for the fiscal year ended June 30, 1939 shows that 316 statements for 487 issues became effective in the gross amount of $2,494,000,000. Of this total, however, $442,000,000 represented securities not proposed for sale by issuers. Among the larger items representing securities not proposed for sale by issuers were $215,000,000 of securities reserved for conversion, $101,000,000 of securities to be issued in exchange for other securities, $68,000,000 of securities registered for account of others, $47,000,000 of securities reserved for other subsequent issuance, and $10,000,000 of securities reserved for exercise of options. The remaining amount of $1,000,000 consisted of securities to be issued. against claims, for other assets and as compensation for selling and distributing services.

There remained after these various deduction items $2,052,000,000 of securities proposed for sale by issuers. The total compensation to be paid underwriters and agents on these securities was $61,000,000, or approximately 2.9 percent of expected gross proceeds. Other selling and distributing expenses aggregated $13,000,000, or 0.6 percent of gross proceeds.

Indicated net proceeds to accrue to issuers after all selling and distributing expenses amounted to $1,978,000,000. Some 62 percent of these net proceeds was to be applied for repayment of indebtedness and retirement of preferred stock. Repayment of indebtedness alone amounted to $1,135,000,000, or 57 percent of net proceeds, and retirement of preferred stock to $105,000,000, or 5 percent. Net proceeds to be applied for expenditures for plant and equipment totalled $264,000,000, or 13 percent of the total, and for increase of working capital $153,000,000, or 8 percent. Therefore, indicated expenditures for these new money purposes aggregated slightly more than one-fifth of total net proceeds. The amount to be expended for purchase of securities for investment was $265,000,000, or 13 percent of net proceeds.

The proportionate distribution of the proposed uses of net proceeds for the past fiscal year as against proposed uses for the two preceding fiscal years is shown in the following table:

The great bulk of effectively registered securities proposed for sale by issuers was to be offered through underwriters. A total of $1,580,000,000, or 77 percent of the total, was to be offered through underwriters, as compared with $390,000,000, or 19 percent, to be offered through agents, and $82,000,000, or 4 percent, to be offered directly by issuers. The amount of securities to be offered to the public aggregated $1,695,000,000, or 83 percent of the total, with offerings to security holders amounting to $251,000,000, or 12 percent, and offerings to all others $106,000,000, or 5 percent.

Detailed statistical tables showing the number of issues, type of securities, classification of issuers, gross proceeds, net proceeds, cost of distribution, channels of distribution, and proposed use of funds for the securities registered under the Securities Act of 1933 during the fiscal year ended June 30, 1939, are contained in tables 1 to 9 of Appendix V. In interpreting the tables, as well as the summary figures quoted above, it should be kept in mind that these statistics are based solely on the registration statements filed by the registrants with the Securities and Exchange Commission. Therefore, all the data refer to the registrants' intentions and estimates as they appear in the registration statements on the effective dates and, thus, in reality represent statistics of intentions to sell securities rather than statistics of actual sales of securities.8

Securities registered under the Securities Act of 1933 constitute only part of all new issues offered for cash. Whereas the statistics of

The difference between the amount of securities registered and the amount of registered securities actually sold may be assumed to be largest-apart from registrations by investment companies and trusts with continuous sale for the issues of small and unseasoned corporations. Special inquiries of the Commission show that for issues of this type actual sales have averaged less than one-fourth of the amounts registered. The relevant figures may be found in "Selected Statistics on Securities and on Exchange Markets," table 19.

registrations reflect only registrants' intentions to sell securities, the statistics of new offerings include only actual offerings. Comprehensive statistics of new cash offerings of securities for the period July 1, 1934, through June 30, 1939, are presented in tables 10 and 11 of Appendix V. The tables show the estimated gross proceeds of issues offered for sale, classified by type of offering, type of security, and type of issuer."

In general, the data cover only such issues over $100,000 in amount, and (for debt issues) of a maturity of 1 year or over at date of issuance as were reported as offered for cash in the financial press, in documents filed with the Commission, or in other available sources. The statistics include offerings irrespective of whether the issues were publicly or privately placed, and regardless of whether or not they were registered under the Securities Act of 1933. The statistics of new offerings thus embrace certain corporate and non-corporate issuing groups exempt from registration under the Securities Act of 1933 either by virtue of the nature of the transaction or issuer, chiefly securities of common carriers, most issues placed privately, and Federal, State, and local governmental issues.

According to these tables, $6,919,000,000 of new issues of securities was offered for cash during the fiscal year ended June 30, 1939, compared to $3,484,000,000 during the preceding year, $7,639,000,000 in the fiscal year ended June 30, 1937, $11,265,000,000 in the fiscal year ended June 30, 1936, and $3,768,000,000 in the fiscal year ended June 30, 1935. Of the $6,919,000,000 issues floated during the fiscal year ended June 30, 1939, $2,552,000,000 was issued by corporations, $2,939,000,000 by the United States Government and Agencies, $1,326,000,000 by states and municipalities, $83,000,000 by foreign governments (sold in this country), and $19,000,000 by eleemosynary institutions. Of the corporate securities offered, public utility companies were the largest issuers, comprising 59 percent of the total. The principal instrument of flotation was the fixed-interest-bearing security, 97 percent of total securities (corporate and non-corporate) having the form of bonds, notes, or debentures.

EXEMPTION FROM REGISTRATION REQUIREMENTS

Section 3 (b) of the Securities Act of 1933, as amended, authorizes the Commission to provide by rules and regulations conditional exemptions from the registration requirements under that Act for certain small issues. Specifically, these exemptions may be provided only where the public offering does not involve an aggregate amount of more than $100,000. Acting under this authority, the Commission

• Monthly figures from January 1, 1934, through June 30, 1938, may be found in "Selected Statistics on Securities and on Exchange Markets," tables 2 and 3.

has adopted Regulation A, governing such exemptions other than those relating to oil and gas interests; Regulation B, covering exemptions pertaining to fractional undivided interests in oil or gas rights; and Regulation B-T, providing exemptions of interests in an oil royalty trust or similar type of trust or unincorporated association. During the past fiscal year there were received and examined a total of 179 prospectuses filed pursuant to Rule 202 of Regulation A. These prospectuses related to exempted issues (exclusive of oil and gas offerings), which represented mainly stocks and involved a total offering price of $13,352,323. The individual issues ranged in aggregate offering price from a low amount of $10,000 to the maximum possible amount of $100,000. The decline in the filing of these prospectuses, compared with the number received during the 1938 fiscal year (353 prospectuses involving a grand total offering price of $26,827,793) appears to be due largely to the greater use being made of the newer exemption available under Rule 210 of Regulation A.

Also, during the past fiscal year, there were filed with the Commission, under Rules 202, 203, and 210 of Regulation A, 52 prospectuses and numerous amendments to correct deficiencies in the prospectuses as originally filed, relating to exempted issues of oil and gas offerings. The aggregate offering, as disclosed by the prospectuses, amounted to $3,427,816.

As one of several measures adopted temporarily by the Commission to aid small business enterprises in raising capital, Rule 210 of Regulation A was, on February 25, 1939, continued in effect until further action by the Commission. This indefinite extension will afford the Commission further opportunity to study the results of the operation of this rule in the light of a proposed complete revision of all exemptions provided under Regulation A. The Commission received and examined under Rule 210 during the year a total of 284 letters of notification for issues involving a total amount of $20,958,450, the aggregate amount of individual issues ranging from $7,000 to the maximum possible amount of $100,000.

In addition to the indefinite extension of Rule 210 and work on the proposed complete revision of all exemptions provided under Regulation A, the Commission took other steps during the year in its effort to ascertain how the requirements may be revised so that particularly the small business enterprises will find the raising of new capital easier and less expensive. These additional measures include an indefinite extension of Amendment No. 32 to the Instruction Book for Form A-2, which amendment, originally adopted at the same time as Rule 210 during the latter part of the 1938 fiscal year, widens the scope of Form A-2 and permits the omission of certain financial data in specified instances. Also, the work of the