Yesterday was a banner day for bureaucracy's paper pushers.
Messengers for some 6,000 U.S. corporations trooped into the Securities and Exchange Commission's headquarters in the District, each with a half-dozen copies of the thick annual financial summaries that most publicly owned companies are required to file with the government three months after the start of a new year.
It is a ritual repeated annually at the SEC, which must receive this flood of paperwork and promptly catalogue, copy and file it in its public record room, to give millions of investors the basic information they want -- or should want -- about a company's assets, sales and profits.
Edgar promises to change all that.
Edgar, in good bureaucratic fashion, is an acronym Electronic Data Gathering, Analysis and Retrieval.
More than 170 companies are transmitting financial reports electronically into an SEC computer in the Edgar pilot project. Their Form 10K annual reports, public stock offering documents and proxy statements are, or soon will be, accessible on computer terminals at SEC offices in Washington, Chicago and New York.
At the SEC, Edgar is seen in almost human terms, as a helpful, if nerd-like electronic giant, who promises to lift a monumental paperwork burden off the commission staff.
The Edgar project is in the third year of a $15 million trial run to determine whether a "paperless" filing system for key financial reports can work.
If Congress approves the final plan, Edgar will become operational a year from now. Within 2 to 3 years, the nation's 11,000 publicly traded companies and 2,700 investment companies that report to the SEC will be filing electronically, said Amy Goodman, SEC associate director who runs the project.
It will be possible for companies, Wall Street financial houses and millions of investors with home computers to inspect corporate financial information over computer terminals instead of waiting for paper copies to arrive and wading through hundreds of pages in each report, SEC officials said.
To SEC Chairman John S. R. Shad, Edgar represents a big part of the technological fix that the SEC is counting on to meet its mounting enforcement challenge. "When fully implemented, the system will increase the efficiency and fairness of the securities markets," Shad told a congressional subcommittee last month.
It will be simple to compare the corporate officers listed in newly organized companies with a list of those who have been in trouble with the SEC. "The SEC knows who has been in securities problems before. We know. We would simply ask the machine to search the principals of a company for any history of securities violations," said H. Wayne Howell, director of the Georgia Securities Division in Atlanta.
The SEC also will follow a strategy similar to the Internal Revenue Service's screening process, to look for telltale patterns in financial data that could tip off suspected foul play, said Goodman.
"The pilot is working now, with some bumps and bruises, for about 170 users," said one outside expert, Harold Cooney, president of Sorg Printing Co. of New York, a leading printer of corporate financial data.
"If it's going to work for everybody, it has to become a much bigger project," he added. How far and fast it grows to serve individual investors remains to be seen, he said.
Congress is willing to fund the SEC's internal processing requirments -- the computers, hardware and software its staff will require.
The additional facilities needed to give individuals and companies access to Edgar's data will have to be paid for by the public. "I am somewhat concerned about the cost of the project," said Cooney, who has worked closely on Edgar.
He predicts the financial publishing industry will not be displaced immediately by Edgar, because companies will have to prepare paper reports as well as electronic filings. And his company and others in the industry have geared up to be the conduits for the electronic data that might replace paper, in time.