The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1909-06-17
LIMELIGHT TURNED
ON SPECULATION
Continued from Page One

= tcntlOn to the New York law Of ISL,
which declared void all short sales, and
TO the law of 1858, repeating the act
of 1879 and Iegalizing short sales.
Manipulation of prices is divided by
, the committee into two classes; first,
that which is resorted TO for the pur,,
pose of making market for issues or
) new securities, and second, that which
is designed to serve merely speculative
purposes in the endcavor to make
profit as the result of fluctuations
which have been planned in advance.
The report then says:
"The first kind of manipulation has
certain advantages, and when not ac"
companied by matched orders is unob-
ioctionable per Sc. 1t is essential to
the organization and carrying through
of important enterprises, such as iafSe
corporations, that the organizers should
be able to raise the money necessary 70
complete them. This can be done only
by the sale of securities.
Manipulation Analyzod-
t'The second kind of manipulation
Gus criticism. 1t has for It's object
either tho creation of high prices for
particular stocks, in order to draw III
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 un. .iustlhable man
ipulation of securities, as IN the case
of American Ice stock While we have
been unable to discover any complete
remedy short of abollshing the Stock
| Exchange itself, we are convinced that
the exchange can prevent the worst
form of this evil by exercising It's IN
| 1uence and authority over the members
to prevent them. When continued man
Iofi &c &c r1t In RI
cnced observers. y
Severe condemnation of matched or
ders'' is expressed. "We refer" the
report says, ''to that class of trans
actions engineered by some manipula-
tor. who sends i number of orders 81
multaneously to different brokers, some
to buy and some TO sell. Since they are
legal and binding, we find a difficulty
In suggesting legislative remedy.
But where tho activities of two or more
brokers IN certain securities become so
extreme as to Indicate nlpulaJlon
rather than genuine transactions, the Of |
fcers of the exchange would be remiss |
unless they exercised their influence
and authority upon such members III |
q way to cause them to desist from such |
suspicious and undesirable activity.
1.-THE subject of corners in the stock !
market has engaged our attention. The
Stock Exchange might properly adopt |
rule providing that the governors
shall have power 10 decide when a cor
ner exists and to fix Il settlement price,
so as to relieve innocent persons from
the injury or ruin which may result
therefrom. The mere existence of such
Il rule would tend TO prevent corners.
Chance for Improvement,
The board of governors of the Stock
Exchange should improve present con
-, l.
crs, according to the committee. 1t is
suggested that the books of members of
the exchange should be subject
to periodic examination under
rules TO be prescribed by the eX-
change. 1t is declared further that
when a broker sells n customer Is securi.
ties for his own benefit he should be
held guilty of larceny and a statute to
that effect is recommended. 1t is set
forth also that rules should be made
to prevent dealing for any clerk or
employee Of a bank or other
corporation. More stringent
requirements for the listing of securi-
ties on the Stock Exchange are advo.
Gated, among them that the exchange
should exact 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,
except for temporary issues, should be
abolished, says the committed 1t is
IN the unlisted department that stocks :
Of certain companies which have not
supplied all information desired by the ;
exchange are traded in. The passage !,
Of statute is advocated providing that :
IN case any purchase or sale by broker =
was not actual and bona fde, the Gus =
5omer shall recover three times the !
mount of the loss he sustained thereby. =
reservation of the sheets of the EX- =
change Clearing House for six years is !
recommended. 1t is also recommended :
hat trading on the exchange be done :
'n the basis of reasonably small unit, \
iay 100 shares of stock, and that a bid +
1er TOR more than 100 shares be re. r
lured to accept offers in the l00.share q
inlts. This, it is held, would tend to =
prevent matched orders.
Incorporation Not Favored \
The committee does not favor the in. i
of the Stock Exchange, t
lolding that ''under existing conditions. t
'eIng voluntary organization, it has a
Utmost unlimited power over the CON Il
iuct OF Its members and IT can subject p
hem to instant discipline for wrong. S
Ioing, which it could not exercise i'm a c
ummary manner If il were an incor. b
,orated body. This committee in re- p
A'pih hb'loibS Iut luCOTDOru-
ion of the exchange, does so in the ex s.
..ectation that the exchange will in the e
future take full advantage of the il
'owers conferred upon ii by its volun. t
ary organization, and will be active e
n preventing wrongdoing such as has s.
ccurred IN the past. Then we believe
hat there will be no serious criticism
T the fact that it is not incorporated. 4
I, however, wrongdoing recurs, and it N
hould appear to the public at large +,
nat the exchange has been derelict In 81
xertlng It's powers and authority to o.
revent 1T, we believe that the public a
vlll insist upon the incorporation of II
he exchange and its subsection to state NJ
uthorlty and supervision. - q,
investigation shows that on one ~
etlve day 81 per cent of the total 4,
apparently originated in ~
'ew York city and rs per cent in other
ccalities.
The Consolidated Stock Exchange. to
The committee describes the Con e'
olidated Exchange as a secondary a
larket of no mean proportions its tr