Evening star., 1909-01-10
WALL STREET ON TRIAL
Hughes Expert Commission
Will Probe Its Methods.
SEEKING CAUSE OF EVILS
Problem of Regulating Speculation
Regarded Very Difficult.
GAMBLING INSTINCT NATURAL
Eminent Men of Wide Experience
Selected to Conduct Searching
Investigation.
BY WILLIAM f.. CURTIS.
Special Correspondence of The Star and the
Chicago Record Herald.

BY WILLIAM f.. CURTIS.
Special Correspondence of The Star and the
Chicago Record Herald.
NEW YORK. January 9. 1909.
The commission appointed by Gov.
Hughes to discover what is the matter
with Wall street," has organized. has
obtained camping ground in the beautiful
building of the chamber of commerce and
will commence business i'll a few days.
The personnel of the commission is beyond
criticism. Every member commands the
respect and confidence of the public. and
the financial community rejoices because
OF the high character, the intelligence and
the broad mindedness of those who have
been selected to do the work.
Safe and sane financial people have
been expecting such an investigation for
along time. They have felt that it was
necessary, but dreaded it just as an af
ficted man will dread a surgical opera
ton which he realizes must be endured
sooner or later. They are satisfied. how
ever. with the surgeons who have been
selected. They have dreaded a political
committee from the legislature. They
have feared that resolution would be
introduced by some 'hayseed' member
as soon as the assembly met. and "a
bunch Of jays as one irreverent gen
tleman expressed ii. would come down
here OH a raid to create a sensation, gain
notoriety and make political capital for
the use of demagogues. But that danger
is over and perhaps Gov. Hughes in
tended to avoid it by anticipating the ac
ton OF the legislature and selecting men
who will not be looking for political capi-
tai play the demagogue or attempt to
create sensations, but will conduct a
quiet, sensible, practical investigation into
customs and conditions, and recommend
measures to protect legitimate specula-
SO far as such a thing is possible.
Difficult to Regulate Speculation.
Every one will admit that a man with
the money has the right to buy any kind
of property, be it grain, pork, cotton, real
estate or railway stock, which he be-
lieves will advance in value. 1t will also
be conceded that every man has a right
to sell whatever property he believes will
diminish In value. SUCH transactions are
dffteuft to drawthsEunes on that kind
OF fradfngs There-will always be a diff
ference of opinion as to the limits of legit-
innate speculation. At the same time
every body concedes~ that things are not
right in Wall street. and that something
should be done as soon Us possible to re-
strict speculation anu protect the public
against the perils that lie in such ''fren-
Zied IN alce' as brought on the panic Of
1907.
How England Tried It.
The attempt to regulate speculation is
not new. AS long ago as 1874 the Brit
ish parliament passed what is known as
Sir John Barnards Act to Prevent the
Infamous Practice of Stock Jobbing"
It's preamble declared that:
Whereas great inconvenience have
arisen and do daily arise by the wicked,
destructive and perniciouS practice of
stock-jobbing, whereby many of his
majesty's good subjects have been and
are diverted from pursuing their lawful
trade and avocatiOnS to the utter ruin of
themselves and their families to the
great encouragement of industry, and to
the manifest detriment Of trade and COM
merce" etc. etc. and it was therefore
enacted That all contracts and agree
ments whereby premium was paid for
the privilege OF delivering, receiving or
accepting any article OF value or securi-
ties whatever and all puts and refusals
relating to the present or future price
should be declared void and that money
due on them could not be collected by the
maker of the wager
Sir John Barnard's act remained on
the British statute books until 1860 when
II was repealed by parliament. and it
til 1872. when it was repealed, and as a
substitute the Legislature of New York
passed law specifically declaring that
all contracts for future delivery Of shares
OF banks or companies or any other Sc
curities were void, and providing that
the loser could recover his money by
bringing suit in the proper court. But
this law was never enforced.
Stock Exchange Rules in New York.
~
came into existence in 1917, trading was
regulated by its rules, provision was
made for the adjustment of disputes be-
tween members, and fictitious sales or
contracts were declared sufficient ground
for immediate expulsion. This was in
tended TO prevent stock jobbing," and
various other restrictions have been
adopted from time TO time by the stock
exchange TO prevent corners and other
evil practices that have given Wall street
such bad reputation throughout the
country. These rules have been enforced
more or less strictly during the years
past and since the last panic there
has been a strong and growing public
opinion in financial circles in favor of
suppressng gambling, but the Wisest men
on the street declare that IL is i'm
possible. They welcome cordially the
event of the commission which Gov
their earnest cooperation, with the hope
that something may be developed to re-
strain the wild bulls and the unruly bears
that make the trouble.
Many Mistake Result for Cause.
Al the same time it is contended that
the present system is the most effective
for conducting business that can be de-
vised, and that it would be impossible
for this commission or any other to in
vent method of controlling the specu-
lative element. They say it is impossi-
BILE to compel buyer to tell whether he
is buying for investment for rise,
or to compel a seller to tell whether he
actually owns the stock or the cotton or
grain he is offering for sale No law
can be framed to prevent gambling. and
no law requiring an actual transfer of
stocks or commodity that are bought and
sold could be enforced.
Rational members of the stock ex-
change will tell you they are just much
opposed to wild speculation as anybody.
and even more SO. because their interests
are always in peril. and they would stop
ii If they could. No one knows well as
they the evils of speculation, but at the
with those who arc trying to remedy this
evil by legislation is tliat they mistake the
result for the cause.
Human Nature Must Be Dealt With
IN old veteran remarked the other day
when l was asking him about it: Tine