Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-06-17
COMMITTEE
HITS CURB GAMBLERS
scontinued From First Page,

Of the securities involved. We do not
think that it is wrong to agree to sell
something that one does not possess,
but expects to obtain later. Short-sell-
ers endeavor to select times when
prices seem high in order to sell, and
times when prices seem low in order
to buy, their action in both cases serv-
ing to lessen advances and diminish
declines of prices. In other words,
short-selling tends to produce steadi-
ness In prices, which is an advantage to
the community. No other means of re-
straining unwarranted marking up and
down of prices has been suggested to
u.s." The committee here calls atten-
ton to the New York law of 1872
which declared void all short sales
and to the law of 1858, repeating the
act of 1912 and legalizing short sales.
The second kind of manipulation
mentioned is undoubtedly open to seri-
Gus criticism. 1t has for its object
either the creating of high prices for
particular stocks, in order to draw in
the public as buyers and to unload up
on them the holdings of the operators
or to depress the prices and induce the
public to sell. There have been in
stances of gross and unjustifiable man.
ipulation of securities as in the case
of American ice stock. While we have
been unable to discover any complete
remedy short of abolishing the Stock
Exchange itself, we are convinced that
the exchange can prevent the worst
forms of this evil by exercising it's in
f1uence and authority over the members
to prevent them. When continued
perfenced Observers"
+. Severe condemnation of matched
orders" is expressed. I'VE refer" the
report says, Ito that class of transac-
tions engineered by some manipulation
who sends number of orders stimuli
taneously to different brokers, some to
buy and some to sell. Since they are
legal and binding, we find difficulty
in suggesting a legislative remedy But
where the activities of two or more
brokers in certain securities become SO
extreme as to indicate manipulation
rather than genuine transactions, the
officers of the exchange would be re-
miss unless they exercised their influ-
ence and authority upon such members
in way to cause them to desist from
such suspicious and undesirable ac-
tivity.
The subject of corners in the stock
market has engaged our attention The
Stock Exchange might properly adopt
a rule providing that the governors
shall have power to decide when a cor
ner exists and to fix settlement price
so as to relieve innocent persons from
the injury or ruin which may result
therefrom The mere existence of such
a rule would tend to prevent cor
ners."
The Consolidated Stock EXCHANGE.
The committee describes the Con-
solidated Exchange as a Secondary
market of no mean proportions" It's
sales averaging about 45,OO0,O00 shares
per annum. OF this exchange the COM
mfttee says: 1.-THE fact that it's mem
bers make speciality of broken lots,
namely transactions in shares less than
the 100 unit, is used as a ground for
the claim that it Is a serviceable insti-
tuition for investors of relatively small
means. But 1t is obvious that its utfl-
ity as a provider of capital for enter
prises Is exceedingly limited, and that
it affords facilities for the most in
furious form of speculation - thai
which attracts persons of small
means"
cognate Subjects.
Under the heading "cognate subjects
the committee discusses holding com.
panies, receiverships, the money mar.
ket and the usury law. 1t suggests that
stockholders of subsidiary compan,
should have the right to examine the
books of the holding company; that the
courts might place short time limita.
ton on receivership; that the questions
concerning the money market, which
are under investigat ton by the fedora
authorities could not be adjusted eithe,
through exchange regulation or state
Legislation, and that the New York law
which permits call loans of $4,000 OF
more, secured by collateral, to be made
at rates higher than per cent should
be permitted to stand as it's repea
would not be beneficial.
The Curb Market.
The unorganized status of the curl
market, especially with reference Il
mining shares is discussed by the com.
mittee, as follows:
Bitter complaints have reached u.
Of frauds perpetrated upon confidins
persons, who have been induced to pur.
chase mining shares because they ar.
quoted on the curb; these are fire.
quently advertised in newspapers ant
circulars sent through the mails as 81
quoted.
Notwithstanding the lack Of prope
supervision and control over the ad
mission of securities to the privilege o
quotation, some Of them are meritori
Gus. and in this particular the curl
performs a useful function. The ex
istence of the cited abuses does not
Of the curb market. Regulation is
however, imperative. About IS pc
cent Of the business Of the curb come.
through the offices of members of tn,
New York Stock Exchange, but pro
vision Of the constitution of that ex
change prohibits its members from be
coming members of, or dealing, on, an,
other organized stock exchange in New
York Accordingly operators on tn,
curb market have not attempted t,
form an organization. The attitud
Of the stock exchange is therefor,
largely responsible for the existence o
such abuses as result from the wan
Of organization Of the curb market
"The stock exchange should compe
the formulation and enforcement o
such rules as may seem proper for tn
regulation Of business on the curb, tn
conduct of those dealing thereon, and
particularly. for the admission Of Sc
curities to quotation"
The abuse Of advertising is gone int,
at. some length. the committed declar