Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-11-10
INSPECTION OF BUSINESS
Futures" Prohibited Except Under
Certain Conditions.
CHECKING DEALS ON MARGINS
The Gambling" Register-objec-
lions Of Brokers-Fears That
Much Money Will Be Driven
to Other Cities.
BY WILLIAM z. CURTIS.


Herald.
The same frantic speculation that has
been going on In the United States has
been seen in Germany, and the conse-
quences have been so serious that the
reichstag has passed a restriction law
that would seem almost tyrannical In the
United States. 1t lays down minute re-
quirements concerning the organization OF
stock exchanges and their methods OF do
ing business. and authorizes a government
official called ''hourse commissioners to
go on the bourse every day and see that
the law Is strictly oheyed. The produce
section of each bourse has also to put up
with five great landed proprletors on its
committee. who are not members OF the
bourse at all. but are appointed to be
present when the quotations for agrlcul-
tural produce are announced. The aris-
tocratic farmers made a great fight for
this Conce ssion. having the usual rural
conviction that produce quotations were
manipulated against producers; but they
are satisfied by experience and now rarely
appear in the committee to discharge their
functions.
The law does not attempt to establish
uniform practice on all German ex-
changes; though 1t LAYS down principles
to which all must conform. Ii is left to
the government of the individual states to
approve the details Of the regulation for
speculations upon the exchanges in Its
territory. The states can charter bourseS
or they can close them.
The organization of the bourse at Ber-
lin Is in the hands of the Corporation OF
the Merchants" a body OF some 900
members The corporation chooses a gen.
al 'plGpSt
merchants which controls the bourss
and acted until a few months ago as the
chamber of commerce for Berlin. The
bourse committee. which has dlrect
charge of the institution In all its parts,
Is composed OF thirtytWo members, of
whom twenty four are elected by the cor
poration and eight by the eldest The
members are elected for three years, and
one third Of them drop out every year A
section of the committee has charge of
the produce division. The bourSe COM
mittee sees that the laws and the regu-
latons are obeyed. and appoints various
committees for that and for other pur-
poses. The listing committee. however
is appointed by the eldest"
Terms of Membership.
The terms of membership on the bourse
are extremely easy from the American
point of view. The number OF members
Is not fixed and seats are not bought and
sold as In Wall street. The applicant
for a seat must either be member Of
corporation or director in joint stock
company or a responsible member OF a
legally registered firm in Berlin or its
vicinity Employees Of such companies
can acquire CARDS OF admlssloh' nut are
not permitted to do business for their
employers. There is no membership fee
but the yearly card costs from "a to $40
varying from year to year. as the budget
of the eldest requires. Many news
paper reporters buy cards. but nomlnaIly
they are not entitled TO trade
These liberal terms of membership make
the attendance very large. The number OF
persons entitled to admission to the floor
of the Berlin bourSe is above two thou
sand three hundred. 1t IS Impossible TO
state the actual attendance since many
firms hold a membership merely for use
as needed. and some for the standing it
gives: while many large banks send for
nida BILE delegations of their employees to
the bourse every day. The Deutsche Bank
alone has twenty-four Of its officials on
the floor. The average daily attendance
may be placed at between one thousand
eight hundred and two thousand. The
bourse meets every week day a noon and
closes at 3 O'Clock. The official quotation
list Is made up at o'clock.
Salient Points Of the Law
Germany, under the pressure Of the
agrarian party. has undertaken what
other nations have been DESTROYS of do
ing. to check speculation In stocks and
also in food products, especially grain.
Whether this will be accomplished by the
new law remains TO be seen. and it will
certainly De interesting for other nations
to watch the experiment. Below are given
the most salient features of the law:
/. No exchange can be established with
out the consent Of the government, which,
through a commissioner. will exercise a
continued supervision over its actions and
lsalngs.
=. A court of honor Is created, which
may exclude persons from the exchange
after due trial. Parties WHO have been
judicialy declared bankrupt will DO ex-
cluded for at least six months and perma-
nently II the bankruptcy was fraudulent.
s. When the listing Of stocks Or bonds
IS applied for at the exchange, commit
tee will make thorough investigation OF
all circumstances affecting their security
and desirabiity and will then decide
whether they may be admitted. Before
this Is done a prospectus must be Issued,
giving all particulars OF such securities.
Stocks will not be admitted until one year
after the entry of the corporation or nrna'
name in the commercial register. nor be-
fore the publica ton of the balance sheet
for the first business year. All parties
who have signed the prospectus are 1nd1-
yiGually liable for the correctness OF all
statements In the same. and must make
good any loss or damage 10 the takers Of
such securities resulting from false or mis-
.ading or omitted statements IN the pros
,ectus. Besides. they are liable to be
>rimnally prosecuted If the circum-
stances warrant suta proceedings.
1. All dealings in futures or on terms at
III, exchange are prohibited, unless the
parties to the transaction are entered in
the so-called exchange register The Or
.ginal entry in this register costs 1856
marks (S35. 70) and an annual fee of %
marks $3.50 is exacted to keep the entry
alive. The register is public and be
Inspected by any person. The entries are
at once published in the Imperial Gazette
tRe:chsanzeiger) and the local Official pa
pars al the expense of tho parties. and a
compilation Of all names will be publis he'd
once a year III :.ie imperial Gazette. Per
sons emitting to have their names entered
in the exchange register have no legal
claims against each other by reason of
any transactions Such claims are consid-
ared in the light of gambling debts.
, Dealing il futures in grain mill
products or the stocks of mining and
manufacturing esta adjustments on the ex-
change Is forbidden.
Il. Whoever habitually and for selfish
purposes induces inexperienced persons
TO speculate the exchange in such
articles as are outside Of their sphere
Of business will be punished with i'm
-r>-'.-- nd y rnc0rv fine not ex-
ceding 1900 marks $3.50.
20 Check Deals on Margins