Managements Win

Irate minority stockholders in two investment trusts made attempts in Manhattan last week to oust their respective managements. A stockholders committee headed by Stockbroker Sanford Griffith and Thomas E. Brittingham Jr. of the famed Wisconsin Alumni Research Foundation wanted to turn out the management of Fourth National Investors, a $22,000,000 trust run by Fred Y. Presley, who also promoted and is still president of National Investors, Second National Investors, Third National Investors. There was little complaint about Mr. Presley's investment record, which is better than the sorry average (TIME, March 9). Though questioning management relations between Mr. Presley's National Investors and Mr. Presley's Fourth National, the committee was most disturbed by the fact that Fourth National stock sells for far less in the open market than the value of the excellent assets behind it, a condition by no means unique among investment trust stocks. The committee felt that their trust should stand ready to buy its own stock at any time for approximately the actual asset value, as does that remarkably successful open-end Boston trust, State Street Investment. On showdown the insurgent committee was outvoted by Mr. Presley's supporters, 261,000 shares to 107,000 shares.

Last week's other squabble was between the Brown Brothers, Harriman & Co. management of Standard Investing Corp. and Phoenix Securities Corp., dominated by Wallace Groves, a secretive onetime small-loan banker from Baltimore. Controlling some 25% of Standard Investing's stock, the Groves faction had a good talking point in Standard's investment record, which could hardly be called impressive. On the other hand, Wallace Groves catapulted Phoenix Securities' assets from $2,000,000 to $9,000,000 in the past few years.

Speaking for Standard's management, John Foster Dulles, famed international lawyer, suavely acknowledged Truster Groves's "remarkable achievement" but doubted whether he or anyone else was "smart enough to make $2,000,000 into $9,000,000 as a regular proposition." Said Lawyer Dulles: "It can't be done without, in the first place, having a substantial amount of high speculation, coupled with a very considerable amount of luck. Anybody who thinks that that thing can be done, and done regularly, is a man, I say, who is playing for a fall." The stockholders apparently agreed, giving the old management a vote of confidence, 211,000 shares to 169,000 shares.

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