Omaha daily bee., 1909-06-17

suit Of fluctuations which have been
planned in advance The report then says:
The first kind Of manipulation has certain
advantages, and when not accompanied by
matched orders" is unobjectionable per
sc. II Is essential TO the organization and
carrying through Of Important enterprises,
such as large corporations, that the organ
izers should be able to raise the money
necessary to complete them. This can
be done only by the sale OF securities.
The second kind OF manipulation men
TONED Is undoubtedly open to serious crit
icism. 1t has, for its object either the crea-
tlon Of high prices for particular stocks,
in order TO draw FIN the public as buyers
and to unload upon them the holdings OF
the operators, or to 9depress the prices
and induce the public to. sell. There have
manipulation OF securities, as IN the case
Of American; Ice stock. 30 While we have
been unable to discover any complete
remedy short Of abolishing the stock Eek
chang Itself, we are convinced that the
Exchange can prevent the worst forms of
/ this stock evil by exercising It's influence
and authority override members to pre-
vent them When, continued manipulation
ers. ~ - r. : cAr-t'
Severe condemnation of,oHmatched orders
is. expressed We refer to that class of
transactions ENGINEERED by. some. manipu-
lator, who sends a number Of orders stimuli
taneously to different brokers, some TO buy
and some to sell. Since they are legal and
s d 1ssI.Istfi we f find 2 als fSt Gbs in s ,bs setIg,
tiles OF two--or' nioret brokers in certain
securities become 50 extreme as to indi-
cate manipulation rather than genuine
transactions, the officers of the Exchange
would be remfss unlesS they exercised their
influence and authority upon such mem
bers In a way to cause them to desist from
such suspicious and. undesirable activity.
The subject of corners in the stock mar
ket has engaged our attention. The Stock
Exchange might properly adopt a rule
providing that the governors shall have
power to decide when. a corner exists, and
to fix a settlement price, so as to relieve
innocent persons from the injury of ruin
which may result therefrom. The mere
existence of such q ruAe would tend to pre-
vent corners e., .., ..
should Regulate Itself.
TIL Board OF Governors OF the Stock ex-
change should improve present conditions
with regard tc failure OF. brokers, according
TO the committee. It is suggested that the
books OF members of the exchange should
be subjected to periodic. examination under
rules to be prescribed by the exchange. 1t
is declared further that when a broker sells
a customers securities for his own bene-
fit, he should be held guilty of larceny
and a statute 10 that effect is recon-
mended. 1t is set forth also that rules
should be made to prevent dealing for any
fclerk or subordinate employee of a bank
Or other moneyed' corporation. More
stringent requirements for the listing Of
securities ON the Stock exchange are ad-
vocated, among them that the exchange
should exact a statement showing how
much of the stock of the company, has
been issued for cash and also showing
what commission has been paid to the
promoters. The unlisted department, ex-
cept for temporary issues, should be
abolished, says, the committee. 1t is In
the unlisted department that stocks. of
certain companies which have not supplied
all Information desired by the exchange
are traded ins The passage of a statute Is
advocated provising that in case any pur-
chase or sale by "a hEokers was not actual
and bone sfide. the customer shall recover
three times, the. amount of 'the, loss he
sustained thereby o. Preservation, of the
sheets Of the exchange clearing house for
six years Is ,treegNrpendsd.y 1t Is also
Recommended that trading on the exchange
be done on tle, basis of a reasonably small
unit, say 100 shares OF stock and that d
bidder for more than 100 shares be required
to accept offers In the 100 share units.
This, it Is held, would tend to. prevent
matched orders.
Opposed to incorporation.
The committee does not favor the incor-
poration. of the Stock exchange. The re-
port says:
Under existing conditions, being a volun-
tary organization, 1t has almost unlimited
$ power over the conduct OF its members,
[ and il can subject them to instant dis
cipline for ~wrongdoing, which Is could not
exercise in a summary manner II II were
an Incorporated body. This committee, in
, refraining from advising the incorporation
OF the exchange, does. so in the eXpecta-
ton that the Exchange will In the future
= take full advantage of the powers con-
farred uDOn IL by its voluntary OrRaniZa-
ton, and Will be active In preventing
1 wrongdoing such ais has occurred in the
, no serious criticism of the fact that 1t is
not incorporated. IT,, however, ~wrongdoing
t recurs, and 1t should appear to the public
D at large that the exchange has been
derelict in 'e~Kerting its powers and au-
thority to prevent II. We believe that the
$ public will Insist upon the Incorporation OF
: the exchange and Its subsection to state
|, authority and supervision. 81
y Investigation shows that on one active
{ day 50 per cent of the total transaction
I apparently originated in New York City
Y and IS per cent in other localities.
Consolidated Stock Exchange.
The committee describes the Consolidated
exchange as a secondary market OF M
. mean proportions" It's sales averaging
about $50 600 shares per annum. or thi
exchange the committee says:
The fact that it's members make q spe
cialty OF broken lots" namely transac
lions in shares less than the 100 unit, /
g used as a ground for the claim that II !
a servicable institution for investors o
relatively small means. But it is obviou
that Its utility as a provider OF capital 70
enterprises is exceedingly limited and tina
l. II affords facilities for the most i~nJuriou
form OF speculation-that which attract
persons Of small means.
Under the heading "Cognate Subjects
the committed discusses holding companies
, receiverships, the money market and tn
- usuary law. 1t suggests that stakeholder
OF a subsidiary company should have tn
, right to examine the books OF the holdin
company; that the courts might place
short-time Limitation on reeeiverships; tina
4" the questions 6ohcerRing the money maj
ket, which are under investigation by III
federal authorities could not be adjuste
either through exchange regulation O
~ state legislation. and that the New YOr
law which perInits cali loans OF, 5000 Q
al more, secured by collateral, to be made a
he rates higher than s per cent should be pei
"a mitted to stand. as It's repeal would nc
be beneficial. r.sr..,
or .. ~ Curb MaFkst.
H. The u~noEganiEed status Of the Curb MAJ
- -.-.~I.II,- a. ..0arnnaa - E,g