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$16.5 billion registered the previous year. The number of registration statements filed was 1,226, 34% greater than in 1958. During the 25-year history of the Commission, approximately $160 billion of registrations have become effective, $71 billion in the last 5 fiscal years. The lowest annual volume of registrations was $659 million in the wartime year 1943. The chart below shows the dollar amount of effective registrations by fiscal years from 1935 to 1959.

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These figures cover all securities effectively registered, including new issues sold for cash by the issuer, secondary distributions, and securities registered for other than cash sale, such as exchange transactions, issues reserved for conversion and issues reserved for longterm options. Of the dollar amount of securities registered in 1959, 77.3 percent was for the account of issuers for cash sale, 17.5 percent for account of issuers for other than cash sale and 5.2 percent was for the account of others, as shown below.

Iccount for which securities were registered under the Securities Act of 1933 during

the fiscal year 1959 compared with the fiscal years 1958 and 1957

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Total.

15, 657

100.0

16, 490

100.0

14, 624

100.0

Securities to be sold for cash for account of the issuer amounted
to $12.1 billion in 1959, a decrease of $1.2 billion over the previous
year. This reflects a 23 percent decrease, about $1.6 billion, in the
volume of debt securities, partially offset by a small increase in the
volume of common stock. Debt securities made up $5.3 billion of
the 1959 volume, preferred stock $400 million and common stock $6.4
billion. Investment company securities showed a sharp increase in
1959 and accounted for 60 percent of the total for common stock
compared with less than one-half in fiscal 1958.

The number of statements, total amounts registered, and a classi-
fication by type of security for issues to be sold for cash for account
of the issuing company is shown for each of the fiscal years 1935
through 1959 in appendix table 1. More detailed information for
1959 is given in appendix table 2, while 5-year summaries of such infor-
mation for the 25-year period appear in part II of appendix table 1.

The amount of securities registered by investment companies in-
creased almost 50 percent in 1959 over the previous year while that
registered by communication companies decreased 80 percent. Among
the smaller groups, the trade group aggregate showed an outstanding
increase. Securities classified by industry, registered for cash sale
for account of issuers in each of the last 3 fiscal years are shown
below:

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Of the net proceeds of the corporate securities registered for cash
sale for the account of issuers in fiscal 1959, 53 percent was desig-

nated for new money purposes, including plant, equipment, and working capital, 1 percent for retirement of securities, 43 percent for purchase of securities, principally by investment companies and 3 percent for all other purposes.

REGISTRATION STATEMENTS FILED

During the 1959 fiscal year, 1,226 registration statements were filed for offerings of securities aggregating $16,622,890,371, an increase of 34% over the 913 registration statements filed during the 1958 fiscal year for offerings amounting to $16,913,744,964.

Of the 1,226 registration statements filed in the 1959 fiscal year, 472, or 39 percent, were filed by companies that had not previously filed any registration statement under the Securities Act of 1933. Comparable figures for the 1958 and 1957 fiscal years were 254, or 28 percent, and 305, or 32 percent, respectively.

A cumulative total of 15,930 registration statements has been filed under the act by 7,397 different issuers covering proposed offerings of securities aggregating over $167 billion from the enactment of the Securities Act of 1933 to June 30, 1959.

Particulars regarding the disposition of all registration statements filed under the act to June 30, 1959, are summarized in the following table.

Number and disposition of registration statements filed

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Total...
Aggregate dollar amount:

As filed (in billions)..
As effective (in billions).

14, 704

15, 930

$150. 7
147.2

$16.6
15.7

$167.3
162.9

• Includes 153 registration statements covering proposed offerings totalling $3,774,427,154 filed by investment companies under section 24(e) of the Investment Company Act of 1940 which permits registration by amendment to a previously effective registration statement.

The gross number of registration statements that became 'effective, including such statements that were subsequently withdrawn or placed under stop order, was 13,273 as of June 30, 1958.

• Excludes 10 registration statements that became effective during the year but were subsequently withdrawn; these 10 statements are counted in the 65 statements withdrawn during the year.

Excludes 2 registration statements that became effective prior to July 1, 1958, which were placed under stop order during the 1959 fiscal year, and also excludes 14 registration statements effective prior to July 1, 1956, that were withdrawn during the 1959 fical year; these 2 and 14 statements are counied under stop orders and withdrawn, respectively.

The reasons given by registrants for requesting withdrawal of the 65 registration statements that were withdrawn during the 1959 fiscal year are shown in the following table:

Reason for registrant's withdrawal request

Number of Percent statements of total withdrawn withdrawn

12

5 36

1. Withdrawal requested after receipt of the staff's letter of comment..
2. Registrant was advised that statement should be withdrawn or stop order pro-

ceedings would be necessary.
3. Change in financing plans.
4. Change in market conditions.
5. Financing obtained elsewhere
6. Regulation A could be used
7. Insufficient funds raised under escrow agreement.
8. Registrant was unable to negotiate acceptable agreement with underwriter.

Total..

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100

RESULTS OBTAINED BY THE REGISTRATION PROCESS

The staff's examination of registration statements often results in significant changes being effected in order that adequate disclosure will be made to the investing public. These changes cover a wide range of subject matters. Examples of disclosures made as a result of the staff's examination are set forth below. Disclosure of Speculative Features

A registrant organized to produce electronic equipment filed a registration statement for 175,000 shares of common stock (par value of 75¢ per share) to be offered at $5 a share, the underwriting commission to be $1 per share. Examination of the registration statement revealed that certain speculative features of the proposed offering had not been adequately disclosed.

The prospectus, as filed, stated that the book value of the company's shares prior to the offering was approximately 96 cents but that after the offering it would be approximately $1.86 per share. The registrant was required to include a further statement that such increase would be contributed by the public investors. The registrant was further required to disclose that the underwriters at a total cost of $75 had acquired 75,000 shares of the company's stock representing 15 percent of the total amount of such stock to be outstanding, whereas if all of the shares offered were sold, public investors would pay $875,000 for 35 percent of the stock to be outstanding.

The company was also required to point out in the prospectus that: (1) it proposes to operate in fields where large expenditures for research and development are considered normal and necessary; (2) competition is intense, there being many companies, some with substantially greater resources than the registrant, conducting research and development work in the same general areas; (3) because of research and development work being done, it is possible that one or more of the registrant's proposed products may became obsolete before

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production is started or at any time thereafter; and (4) only actual production can determine the cost at which any of registrant's proposed products can be produced and only marketing can determine the prices at which they can be sold and the extent of the demand for them. Disclosure as to Use of Proceeds

A company engaged in the business of acquiring and developing oil and gas properties filed a registration statement covering $1,500,000 of 6 percent convertible debentures due 1969, to be offered initially to its stockholders by means of subscription rights. The underwriter agreed that within 6 business days after the termination of the rights offering it would purchase or find purchasers for debentures not taken down by stockholders so that the company would receive the proceeds from at least $400,000 principal amount of debentures. The underwriter also agreed to use its best efforts for 60 days after the termination of the rights offering to find purchasers for debentures not taken down by stockholders.

As originally filed, the prospectus indicated that the great bulk of the net proceeds was to be used for acquisition of new properties and development of properties then held. However, an analysis made by our staff of the financial position of the company and its future cash needs disclosed that the company was in a precarious cash position, that on the basis of the prior year's operations cash requirements during the next 18 months would be substantially in excess of the amount of cash that would be generated during that period and that therefore the purpose of the offering was not to acquire and develop properties, but to remedy the company's serious financial situation. As a result of numerous comments made by the staff, the prospectus was extensively revised and there was set forth in the forepart thereof, a one and one-half page statement regarding the proposed offering and the company's financial problems, including the following categorical statements:

1. The purpose of the offering was to alleviate the company's shortage of working capital;

2. The company had a working capital deficit of $488,635;

3. Current liabilities included $87,835 of notes payable given for past due accounts payable;

4. Past due accounts payable and past due notes payable amounted to $256,572 and $86,335 respectively;

5. The total amount of funds required to remedy the working capital deficit and retire long term debt maturing within the next 18 months was $1,195,204;

6. Since, on the basis of the previous year's financial report, the company's operations would generate only $335,000 of cash during

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