The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-08-27
PENANOE IN WALL STREET.

The brokers of Wall street have sudden
ly awakened to realization of the posi-
bility that there may be some kind of
ethical relation existing between them
and the public. This dawning of a curious
moral conception has resulted, as such
dawn1ngs usually result, from a chastise-
ment which the public is inficting on the
brokers. For the reason that private spec
ulators have been SO heavily nipped re-
Gently by fraudulent deals in Reading,
Atchison, Cordage and other shares, the
public is letting Wall street severely alone
and the business has gone to the dogs.
Hence the brokers are now wondering if it
is really true that honesty is the best
policy.
OF course they are doing great deal of
preliminary arguing with themselves
against the proposition of being brought
to view the moral side of the question.
They take vast pains to show that they
are merely agents, and that dealers and
spectators must take care of themselves;
that it is clearly understood that unlisted
shares are not Endorsed by the Stock Ex-
change and are handled without any
recommendation that in the case of listed
shares the exchange has made thor
ough examination before listing and has
satisfied itself of the soundness of the issu-
ing concern and the real value of its
shares. The answer to this last defense is
that although the exchange did make the
investigation and did actually list after
securing absolute proof that concerns
were worthy of such Endorsement, their
scrutiny ended there. Thus, no matter
how honest in appearance a corporation
was at the time of the investigation, there
was nothing to prevent its becoming dis
honest afterward and still enjoy the in
dorsement which the listing constituted.
As consequence the listing of shares
affords no protection whatever. For that
matter, the shares on which the public
were recently bitten so severely were listed
ones. The practice of listing, therefore,
amounts to nothing except to place the ex-
change in the light of indorsing worthless
concerns and of inducing the origin of
fraudulent schemes which can show the
merit of apparent soundness at the time
of making the application to be listed. In
this way public wrong is committed and
honest enterprises are made to suffer for
the populations of fraudulent schemes
Wall street is now scratching its head and
wondering if it can regain public conf
dence and restore the once thriving busi-
ness of the Stock Exchange.
Two ways of doing this have been sug-
gested. One is to bind the listed corpora
tons under contract to submit their bust
ness to the inspection of the exchange at
stated times, and the other is for the own
ership by the exchange of one or more
shares in every corporation which it lists.
as this would give it the right as a share
holder to compel an investigation at
any time. Both these propositions
involve the idea that a corporation
shall remain on the list only so
long as it is deserving of the Stock Ex-
changes Endorsement; that the exchange
shall be morally responsible for the sound
ness of every concern on its list, and that
it shall be free at all times to drop from
the list any concern of whose soundness it