Professor Gilbert examines the impact of the corporate form of organization upon the utopian thinking of American intellectuals of the progressive era, using the ideas of Charles Steinmetz as an example of the way in which collectivist assumptions were brought to bear on descriptions of society.

Marion L. Chiattello [1] has provided additional empirical support for the suggestion that, because of the high degree of linear interdependence between many of the variables commonly used in banking regression studies, it may be necessary to interpret explanatory variables in a cross-sectional regression equation, not as representing individual influences, but as representing more general factors. Further, he has provided more empirical support for the suggestion that principal component analysis might be useful in helping to isolate and identify some of these general factors.

The stock price literature abounds with applications of the Markowitz [16] – Sharpe [18] market model to American stock price data. There is a lack of corresponding studies for non-American securities, due primarily to the absence of generally available machine readable data bases (see, however, [1], [2], [8, Section 9.5], [11], [17], and [20]. The purpose of this paper is to present the results of some initial tests of the market model for a broad cross-section of the European common stocks. Our data base consists of daily price and dividend data for 229 stocks from seven European countries. In addition, for comparison purposes we have included a sample of 65 American securities.

The traditional valuation framework is unsuited to the task of valuing a growth stock when the capitalization rate is specified in terms of market leverage, simply because it is impossible to maintain a constant ratio of book to market leverage over the growth horizon. This severely limits the usefulness of the traditional model in analyzing the valuation problem. We have proposed a more general form of the model which allows us to show the consistency between M-M's Propositions I and II under growth.

In a previous issue of this journal Boot and Frankfurter (hereafter B-F) published the results of their study on the optimal mix of short-and-long-term debt. While interesting, their results appear to be open to question on the following grounds:

1. Use of wrong data: The short-term borrowing data used by B-F in their regression analysis include the following items which do not generally and, rightly so, belong to short-term debt:

(a) Reserve for deferred or future income taxes,

(b) Restricted surplus for deferred taxes,

(c) Insurance reserves,

(d) Surplus reserves,

(e) Unamortised debt premium, and

(f) Contributions for constructions.

In the past most of the studies whose aim was to explain earnings-to-price ratios (or alternatively, price-earnings ratios) of common stocks attempted to answer the much-debated question raised in both investment and academic circles: Why does a given common stock consistently command a higher price relative to its earnings vis-a-vis other stocks? Success in answering this question has been limited, largely due to (1) researchers' inability to incorporate expected earnings (E) correctly into the empirical measurement of earnings-to-price ratio and/or (2) inadequate treatment of risk variables to explain variability of earnings-to-price ratio.