The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1909-06-17
HOW TO MAKE THE
BROKERS PLAY FAIR
Result of Wall Street investi-
CATION by Commission App
pointed by Hughes
Continued frcm Page I

Oo1tauff TrcIn FGtsC
selling tends to produce steadiness in
prices which is an advantages to the
community
The COMMITTEES says While We
have been unable TO discover any COM
pIete remedy Of abolfshing the stock
exchange itself. we are convinced that
the exchange can prevent the worst
forms Of manipulation By exercising It's
influence and authority over the mem
bers TO prevent them
Severe condemnation OF matched
orders" is expressed
SUBJECT OF CORNERS
The subject OF corners in the stock
market has engaged our attention
says the committee The stock ex-
change might properly Adopt q rule
providing that the governors sfla =
have power to decide when a corner ex-
lists and To TX a settlement pre- -
as 70 relieve innocent persons from Ing
therefron- The mere existence OF sNet.
a rule would tend 70 prevent corners
CONSOLIDATED STOCK EXCHANGE
The committee describes the Consol-
dated exchange as SECONDARY liIa 1
ket Of no mean proportion ~ sales
dNCEdSlI5 ABDUL 10.BuHfbVy
annuHl- OF this exchange the eonl-
mittee says
The fact that its members make make
speciality OF broken lots, haIie 80
transactions in shares less than sns
100 unit, is used as a ground Tor the
claim that it is a servfeeable lnstltu-
ton for investors Of relatively sHiail
means. But it is obvious te ~ -
terprises is exceedingly limited, ana
that it affords facilities for the most
injurious form Of speculatlon--tIlas
which attracts persons OF Snnall means
Under the heading, "Cognate sub
jects," the COMMITTEES discusses hold
ing companies, recefyershtps, the
money market and the Usury law. it
suggests that stock holders Of sub
sidiary company should have the rlgnt
to examine the books Of the holdihs
company; that the courts might place
short time limitation on receiver
ships, that the questions concerning
the money market which are under
investigation by the federal autnori-
ties. could not be adjusted either
through exchange regulation or state
legislation, and that the New YORK
law, which permits call loans OF 5000
or more, secured by collateral TO be
made at rates higher than per cent,
should be permitted 10 stand, as its
repeal would not be beneficial
CURB MARKET
The unorganized status OF the curb
market, especially with reference 70
mining shares, Is discussed by the com
mittee as follows:
Bitter complaints have reached US
Of frauds perpetrated upon cenhdinS
persons, who have been induced to pur-
chase mining shares because they are
quoted on the curb; these are fire.
quentiy advertised in newspapers and
circulars sent through the mails as
so quoted
Notwithstanding the lack Of proper
supervision and control over the ad-
mission Of securities TO the privilege
Of quotation, some of them are merfto-
rfous and IN this particular the curb
istence Of the cited abuses does not,
in our judgment, demand the abolition
Of the curb market Regulation Is,
however. imperative.
The stock exchange should compel
the formulation and enforcement of
such, rules as may seem proper for
the regulation of business on the curb,
the conduct Of those dealing thereon.
and. particularly. for the admission OF
securities to quotation
The abuse Of advertising is gone
into at some length the committee de-
claring that much of the discredit in
the public mind attaching to Wall
street is due to frauds peTpetrated BY
means Of alluTing advertisements.
Another serious evil" the commit
tee says. is committed by men who
give standing to promotions by serv-
ing as directors without full knOwl-
edge of the affairs of the companies"
recommended. providing that any per
son who advertises falsely concerning
corporation shall be guilty of a mis-
demeanor, and that any publisher of
a newspaper or other publication who
fails to obtain from the person re-
sponsibie for such an advertisement
written and signed statement TO the
effect that such person accepts respon-
sibility for the same shall be guilty
of q misdemeanor.
With reference to bucket shops II
fr ID e..
Massachusetts, law be adopted, making
1t necessary for conviction to show
only that the bucket shop keeper in
tended the trade to be settled by diff
erty.
COMMODITY EXCHANGES
In its report on the exchanges that
deal In agricultural products the COM
mittee quotes the report of the indus
trial commission of congress in 1901.
showing that selling for future de-
livery, based upon a. forecast of future
conditions of supply and demand, is an
indispensable part of the worlds COM
merctal machinery. by which prices are
as far as possible equalized through
out the year to the advantage of both
producer and consumer.
Dealings for outsiders says the
committee. ARE usually upon a 10 per
cent margin. Obviously If this margin
were Increased generally. say to 90 per
cent, considerable part Of the criti-
~ AOSoCs III SPCtdidAiOil, par
ticularly as to the cotton exchange,
would be eliminated
The committee closes with review
of the experience of Germany in re-
stricting exchanges and points out the
unfavorable results Of the German leg
islatfon.
The report is signed by the members
of the committee as follows. Horace
White lchairmanJ, Charles A. Schieren,
David Leventritt, Clark Williams John
q Clark, Willard v. King, Samuel H.
Ordway, Edward d. Page, Charles
Sprague Smith, Maurice l.. MuhIeman
secretary.