THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, PREFERRED AND COMMON STOCK HOLDING, SEPT. 30, 1973-Continued The number of shares outstanding in a class of issue are those shares in series which are equivalent in preference and liquidation rights. The number of shares outstanding in class of issue was obtained from the issuing company. Unless otherwise noted, the number of shares outstanding in a class of issue was obtained from manuals published by Moody's Investor's Service, Inc. as of Dec. 31, 1972. Unless otherwise noted, rounded to the nearest thousand and based on number of common shares outstanding for issuing company as published by the Telestat Systems, Inc. in its Telprice/70 service tape on Sept. 28, 1973. Shares outstanding was obtained from the issuing company. Total number of shares outstanding. 31-269 0-74 - 19 Mr. Rockefeller has asked me, as Vice Chairman of the Board to which the Trust Department of our institution reports, to reply to your letter to him of October 11, 1973 requesting certain information as to our institution's holdings in individual portfolio companies including information concerning our institution's rights to vote the stock held in the various companies, the extent to which voting powers are exercised and, thirdly, the extent to which our institution supports or opposes recommendations of portfolio company management regarding board members and other matters voted upon at annual meetings. After investigation of our capability to supply the requested information, we find that it would be very costly and time consuming since our records and computer programs are not designed to provide reasonably efficient access to this type of information. Your letter gives no indication as to the purpose for which the information is desired but, in the hope that it will be useful, I have enclosed copies of our 1971 and 1972 Annual Reports to Shareholders which on pages 21 and 44, respectively, indicate the twenty largest common stock holdings in accounts for which we provided investment management or advisory services. As regards the extent to which we support or oppose recommendations by portfolio company management, it is our policy and practice to vote proxies over which we have discretionary authority in the manner which we believe is in the best interests of the particular trusts or other fiduciary accounts concerned. In those instances in which discretionary authority is shared, it is, of course, necessary to have the concurrence of all parties sharing the authority. Pursuant to our policy and practice, in 1970, 1971 and 1972, for example, we voted proxies on a number of occasions against management proposals or for shareholder proposals opposed by management. Very truly yours. 270 Excerpt from The Chase Manhattan Corporation Annual Report, 1971 The banks trust and investment functions The rapid growth of assets under the administration of bank trust departments in recent years has led to considerable legislative and regulatory attention to the trust and investment functions of the nation's commercial banks. In view of this attention, it seems appropriate to report briefly to stockholders on Chase Manhattan's trust activities. These activities involve a broad range of fiduciary and agency services for individual, corporate and institutional customers, government units and public authorities. They are divided into six principal lines of business. Chase administers $9.5 billion in pension, profit-sharing and individual Keogh (self-employed retirement) funds consisting principally of stocks, bonds, mortgages, real estate and oil interests. During 1971, $385 million was distributed to retirees situated geographically across the entire country. Chase issued 1,300,000 checks in paying a majority of these funds directly to retirees, with a portion being paid over to the employer company for subsequent distribution. In the personal trust area, the bank acts as executor, trustee or guardian of individual assets valued at $3 billion including, in addition to the type of assets held as pension trustee, residential homes, farms, family businesses, copyrights and collections of art. In 1971 we disbursed approximately $90 million in income and $175 million from principal of these accounts to customers located in all 50 states and overseas. Securities held in both personal and pension trust accounts are registered in most cases in the name of Kane & Co., our fiduciary nominee. Investment Management Our Investment Management Division acts as investment advisor to Chase is acting as corporate trustee under 1,300 bond issues brought out by public agencies or private business concerns. The total outstanding lion. Our role is to monitor the actions of the issuing company or agency to insure compliance with the terms of the bond indenture and, if the company goes into default, to assume an active discretionary role to preserve the rights of the individual bond owners. Also in the corporate area, we are acting as either transfer agent or registrar for 1,350 corporations, maintaining stockholder records for over 2,250,000 individual accounts. Since a large portion of our trust function deals with the issuance, transfer and processing of securities, we are actively involved with BASIC, a committee of banks and brokerage firms working with the security exchanges to restructure and modernize basic procedures for security handling, and we are an active participant in the developing stock certificate depositories designed to improve the work flow of buying and selling securities. An important part of the overall trust function is the exercise of our investment responsibilities. In the pension trust, personal trust and investment management areas, we have investment responsibility over $11.8 billion in assets. Of this, $8 billion is subject to our sole discretion, and investment discretion over $3.8 billion is shared with another person or a committee. In addition, we hold significant amounts of securities in trust or investment management accounts which are subject to outside investment direction. Major Holdings The twenty largest common stock holdings in these accounts-including those securities over which we have sole investment responsibility, shared responsibility or are subject to investment direction-are as follows: International Business Machines; Standard Oil Company (New Jersey); General Electric; General Motors; International Telephone and Telegraph; Mobil Oil; Xerox; Eastman Kodak; American Telephone & Telegraph; Polaroid; Aetna Life & Casualty; Atlantic Richfield; E. I. du Pont; Standard Oil of California; Warner-Lambert; Sears, Roebuck; Union Carbide; Honeywell; Connecticut General Life; and American Airlines. Our trust and investment functions are managed independently of our commercial banking operations in order to avoid conflicts of interest. Internal procedures guard against the flow of "inside information" between our trust and fiduciary investment areas and other areas of the bank. This very strict policy against the use of significant "inside information" has been in effect for years, and is under continuous review to make sure that it covers every contingency. The growth of trust assets has led to some concern that bank trust departments may exercise an inappropriate degree of control over American business. Mindful of its responsibilities in this regard, Chase Manhattan has carefully delineated policies and procedures for the voting of proxies under its control. These proxies are voted in accordance with strict legal requirements and the determination by our Trust Investment Committees, composed of senior fiduciary officers, as to the best interests of particular trust accounts. We support the proposal that all financial institutions be required to file reports annually on aggregate stock holdings of a meaningful size and of the proxy action taken. On the other hand, we believe that reporting of individual accounts would be an unwarranted invasion of privacy and a breach of the confidential relationship between fiduciaries and their clients. Excerpt from The Chase Manhattan Corporation Annual Report, 1972 TRUST AND INVESTMENT FUNCTIONS In November, Chase established a sep- The decision to establish a new sub- The Trust Department continues to $3.6 billion. In 1972, the Depart- In the employee benefit fund area, In terms of market value, the twenty Eastman Kodak Company General Electric Company Standard Oil Company of California American Telephone & Telegraph Standard Oil Company (Indiana) Merck & Co., Inc. General Motors Corporation Investment Policies Concern has been expressed in some |