A Nation of Small Shareholders is a solid study that contributes to our understanding of the increasing popularity of securities investing in the decades immediately after World War II. Janice Traflet focusses on the New York Stock Exchange's (NYSE) Own Your Share of American Business (OYS) program between 1953 and 1968, and its centerpiece the Monthly Investment Plan (MIP), and their contribution to rising securities ownership by small and medium-sized individual retail investors.

In the wake of the 1929 Crash and the Great Depression, such investors exited the market in droves and stayed away for decades. Many NYSE member firms blamed the panic of such “unseasoned” investors for the Crash and were slow to adapt postwar strategies to focus on them as potential customers. Small and medium-sized retail investors, not surprisingly, also distrusted Wall Street. When American middle-class wealth burgeoned in the postwar period, they were slow to change opinions that the NYSE was “rigged” for the benefit of a few. They invested instead in homes, life insurance, savings accounts, or government savings bonds and looked to defined benefit pensions as cornerstones of their retirement. Open-ended mutual funds were another vehicle that became popular by the 1960s. NYSE firms, however, shunned mutual funds because of the fear that they would threaten individual stock ownership and entrenched purchasing patterns of their established clients. Furthermore, retail trading in closed-in mutual funds (investment trusts) had been the ultimate “froth” of the securities boom of the late 1920s. Their catastrophic crash in 1929 still echoed.

By the 1940s some NYSE firms were more willing to depart from cocoon-like business models that shunned the small/midsized retail investor. Merrill Lynch broke new paths and sought to expand its limited customer base. However, most other NYSE firms were not so willing. On the eve of the initiation of the OYS program in 1952, under 10 percent of American households owned individual shares. Evidence suggested that this figure had been much higher in 1929, but had been considerably lower in the early 1940s in the wake of the Great Depression.

Professor Traflet is best in her analysis of the NYSE's development of the OYS program and the role of its president, Kenneth Furston. She skillfully mined the NYSE Archives and has placed the incubation and operation of the program in the context of the development of advertising and the parameters of Cold War rationales at their height. The legal battles were no less interesting. One such example was the NYSE's efforts to promote stock ownership by minors by guiding the adoption of the Uniform Gift to Minors Act through all states by the early 1960s. It provided a workable, fair vehicle for share ownership for the minor children, parents and the securities industry (145–50). As a former eleven-year-old, who doubled his hard-earned grass-cutting money in three months in “the market” in 1961, I found the author's account of this outreach to child investors fascinating.

What is less well articulated is the tension between Merrill Lynch and other NYSE member firms over the scope and resources devoted to the OYS program. I would have liked to see more about how the OYS differed or broke ground not addressed already by Merrill. We are told that the NYSE assumed that most of the new MIP accounts, the centerpiece of the OYS program, would be opened at Merrill. They were, but why? The back-office paperwork crisis of the late 1960s, created in part by the success of the OYS effort, ended the lukewarm support of most firms for the program. Why not at Merrill, which folded its MIP accounts into its own Share-Builder Program?

If the relationship in the story of OYS and Merrill is less than clear, so is the relationship of overwhelmingly popular, open-ended mutual funds and NYSE's efforts to democratize securities ownership championed through the OYS. Professor Traflet's conclusion, “that due in no small part to the OYS marketing campaign, the 1950s and the 1960s proved to be critical for reestablishing an equity culture” (176), seems somewhat overstated. But the author's hyperbole should not undermine the value of a good, focussed study.