Daily press. [volume] (Newport News, Va.) 1896-current, 1909-06-20

y
abstract Of the report fthe commit
tee appointed by Governor Hughes to
Investigate into speculation in securi-
ties and commodities. and the organi-
zaticn used in the dealings therein;
The Ney York stock, the Con
solida,ed Stock. the Cotton, the
Produce. the Coffee. the Mercan'
tile. and the Metal Exchanges
and the Curb Market were thorough
~ Investigated and recommendations
looking to Improvement OF existing
conditions were made at length by the
committee. The most drastic finding
Is that affecting the Mercantile and
Metal Exchanges. as follows: Under
present conditions. we are OF the
opinion that the Mercantile aud Metal
Exchanges do actual harm TO prcduc-
ers and consumers, and that their
charters should be repealed.
Concerning speculation in general,
the committee declares that IL may
be wholly legitimate. pure gambling.
or something partaking of the quail
ties OF beth. that in some form II is
n necessary incident of productive
operations: that II tends To steady
prices and that for the merchant or
manufacturer the Spectator performs
= service which has the effect of in
surance. In law" says the report,
Speculation becomes gambling when
tho trading which II involves does not
lead. and Is net intended TO lead, To-
the actual passing from hand to hand
CT the property that Is dealt in.
THE rules OF all the exchanges for
bid gambling as defined by this opin-
ion; bat they make so easy a techni-
cal delivery Of the property contract
cd for, that the practical effect of
much speculation, in point of form
legitimate IL Is not greatly different
from that of gambling"
The ccmmittee makes no present
ment against selling but declares the
tendency Of such selling is TO steady
prices. II is recommended that the
minimum margin should be 20 per
cent and strcng disproval is express
ed of branch brokerage Offices which
supply liquor and resort 10 other i'm
The New York Stock Exchange.
Taking up the New York Stock FIX
change, tne vClum OF transactions
thereon is referred to az making III
probohly the most important financial
institution In the world. it's enormous
business affecting TIE financial and
credit interests Of the country in sol
large a measure that it's proper regu-
lation is matter Of transcendant
Importance" Patrons cf the Exchange
are divided by the committee into five
groups namely. investors who pay
fer what they buy: manipulators OF
prices; floor traders: outside oper-
ators having capital and experience
and inexperienced persons who act
on interested advice. tips advertise
ments in newspapers. or circulars sent
by mail or take flyers in absolute
ignc.ance and with blind confidence
in their lack. Almost without ex-
cepticn they eventually lose" AS to
the character Ct the transactions the
committee declares 1t is unquestioon-
able that only a small part of them
Is OF investment character: sub
stantial part may be characterized as
virtually gambling. Yet We are I'M
able to see how the State could dis
finguish by law between proper and
improper transactions. since the forms
and mcchlniSms used are identical
Rigid statues directed against the
latter would seriously interfere with
the former. The experience o Ger
many with similar legislation is illu-
minafing. But the Exchange. with
the plenarv power ever members and
their operations. could provide correc-
tiyes, rs we shall show.
purchasing securities on margin is
as legitimate a transaction as pur-
chase Ct any other property in which
part payment is deferred We there
fore see no reason whatsoever for rec
commencing the radical change sug-
gested. that margin trading be pro
hfbited
In so far as losses are due TO in
sufficient margins. they would be ma
terially reduced IL the customary per
rensage C margins were increased
In preference to recommending leg
isisfica, We urge upon all brokers 10