The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1909-06-19
REPORT NO EVIL
. IN WALL STREET
Hughes Committee Censures
Mercantile Exchange.
And THE METAL EXCHANGE

Finds That Those Who Take a Flyer
In Stocks on Zip" Generally Lose.
Declares Butter and Egg Quotations
Are Supplied by Men Who Buy
These Commodities From the Pro-
dueers-says "The Pit" 10 a Neees-
slty.
The report OF the committee appoint
ed by Governor Hughes OF New York
to investigate speculation In securities
and commodities and the organization
used in these dealings has been made
public.
The New York Stock. the Consoli
dated Stock, the Cotton. the Produce.
the Coffee. the Mercantile and the
Metal exchanges and the curb market
were thoroughly investigated.
The most drastic finding is that az
fecting the Mercantile and Metal ex
changes, as follows:
Under present conditions we are OF
the opinion that the Mercantile and
! Metal exchanges do actual harm TO
producers and consumers. and that
their charters should be repealed"
The committee declares that specu.
lation In general may be wholly legiti-
mate, pure gambling, or something
partaking of the qualities of both; that
In some form IL Is a necessary incl
dent OF productive operations; that II
tends TO steady prices and that for the
merchant or manufacturer the specu-
lator performs a service which has the
effect OF insurance. In law" says the
report, speculation becomes gambling
when the trading which II involves
does not lead, and is not intended TO
lead, to the actual passing from hand
TO hand OF the property that is dealt
in.
Gambling ls Discussed.
"The rules of all the exchanges for
bid gambling as defined by this opin.
ion; but they make SO easy a technical
delivery OF the property contracted for,
that the practical effect of much spec.
ulation, in point of form legitimate. Is
not greatly different from that of
gambling"
Strong disapproyal Is expressed OF
branch brokerage offices which supply
liquor and resort TO other questionable
means TO induce speculation.
Taking up the New York Stock ex.
change. the volume of transactions
thereon Is referred to as making II
probably the most important financial
institution In the world. Patrons OF
the exchange are divided by the com
mittee into Ave groups: Investors, who
pay for what they buy; manipulators
OF prices; floor traders; outside ope-
rators having capital and experience,
and inexperienced persons who act
on interested advice, tips or adver-
tisements, or take flyers In absolute
ignorance and with blind confidence in
their luck" Almost without exception.
the committee reports. the last group
eventually loses.
Report "The PITT steadles Prices.
: An amendment 10 the penal code Is
recommended providing that any per.
! son who adyertises 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 respon.
sible for such an advertisement a writ
ten statement TO the effect that such
person accepts responsibility for the
} same shall be guilty OF misdemeanor.
In It's 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 deliv-
cry, based upon a forecast OF future
conditions of supply and demand,
Is an indispensable part of the
worlds commercial machinery, by
which prices are as far as possible
equalized throughout the year TO the
advantage OF both producer and con
sumer. The committee then says
Buying for future delivery causes
advances In prices; selling short tends
70 restrain inordinate advances. In
each case there must be buyer and a
. seller and the interaction OF their
trading steadies prices"
Butter and Egg Prices.
: The committee disapproves the prac
tees on the Mercantile exchanges and
the Metal exchange on the ground that
their quotations are not a record OF
actual transactions. On the Mercan
tile, says the report, there are some
"desultory operations In so-called
future contracts In butter and eggs,
but the published quotations are made
| by committee. That committee. "
a the report continues, lis actually a
. close corporation OF the buyers OF but.
ter and eggs, and the prices really
{. represent their views as to the rates