True and Concise

I agree with A. A. Sommer Jr. (“Let the Holders Vote on a Device to Defeat Raiders,” Jan. 18) that there have been excesses in the merger mania sweeping the market today.

However, there are two sides to the problem and giving a disproportionate share of voting power to a few insiders is not the answer. Establishing two classes of stock would eliminate shareholder democracy, which I believe is one of the primary reasons the U.S. investor participates in capital formation. Furthermore, Sommer is very naive about voting procedures if he thinks shareholders really pay attention to most proxy statements. A majority of shares are held in street name and are voted for management unless the custodian is informed that there is dissenting opinion.

Therefore, many proposals for two classes of stock have been approved not because they are popular but because the average shareholder doesn’t understand the implication of the change.

If management truly believes in its abilities, there is one sure protection against hostile takeovers--have the insiders own a majority of the shares.

STEPHEN D. WEINRESS

Partner, L. H. Friend & Co.