The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1909-06-17

new securities, and second that which
/ is designed to serve merely speculative
purposes in the endeavor to make a
profit as the result of fluctuations,
which have been planned in advance.
| The report then says:
| 1.-THE first kind of manipula ton has
certain advantages, and when not ac-
companied by matched orders is un-
Objectionable per Sc. 1t is essential to
the organization and carrying through
of important enterprises, such as large
corporations, that the organizers
should be able to raise the money
necessary to complete them. This can
| be done only by the sale of securities.
"Fhe second kind of manipulation
mentioned is undoubtedly open to
| serious criticism. 1t has for it's OBJ
| ject either the creation Of high prices
! for particular stocks, in order to draw
| in the public as buyers and to unload
upon them the holdings of the oper-
| ators, or to depress the prices and in
duce the public to sell. There have
| been instances of gross and unjustfia
| BILE manipulation Of securities, as in
| the case Of American Ice stock While
complete remedy short OF abolishing
| the stock exchange itself, we are con-
! vinced that the exchange can pre-
vent the worst forms of this evil
| by exercising its influence and author
| ty over the members to prevent them.
! When continued manipulation exists it
| is potent to experienced Observers
| Severe condemnation of matched
! orhers" is expressed. I'VE refer the
| report says, ito that class of transac-
tions engineered by some manipulation
| who sends Il number Of orders stimuli
| taneously to different brokers, some to
| buy and some to sell. Since they are
| legal and binding, we find a difficulty
| in suggesting a legislative remedy
| But where the activities of two or
more brokers in certain securities be-
come so extreme as to indicate manip-
ulation rather than genuine transac-
tioES the officers of the exchange
would be remiss unless they exercised
their Influence and authority upon
such members in Il way to cause them
! to desst from such suspicious and un-
desirable activity.
| 1.-THE subject of corners in the stock
| market 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 or ruin which may
result therefrom. The mere existence
of such rule would tend to prevent
| corners.'
Consolidated Exchange.
The committee describes the Con-
solidated exchange as Il secondary
market of no mean proportions,' i1e
sales avera ging about 45,O00,000 shares
per annum.
| Cognate Subjects.
Under the heading, "Cognate Sub
| jects,' the committee discusses hold,
| ing companies receiverships, the
money market and the usury law. 1t
suggests that stockholders of a sub
sdiary company should have the right
to examine the books of the holding
| company; that the courts mighl place
a short t-time limitation on receiver
ships; that the questions concerning
/ the money market, which are under
| investigation by the federal authori-
! ties, could not be adjusted either
through exchange regulation or state
| legislation, and that the New York
| law which permits call loans of $1,000
| or more, secured by collateral to be
made at rates higher than per cent
should be permitted to stand, as it's
| no ;a1
| The Curb Market.
The unorganized status of the curb
| market, especially with reference to
mining shares, i sdiscussed by the
committee, as follows:
Bitter complaints have reached us
of frauds perpetrated upon confiding
persons, who have been induced to
purchase mining shares because they
are quoted on the curb; these are fre-
| quenty 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 meri-
torious, and in this particular the curb
performs a useful function. The ex-
| istencc of the cited abuses does not,
| in our Judgment, demand the abolition
of the curb market Regulation is,
however, imperative. About SIS per
cent of the business of the curb comes
| through the offices of members of the
| New York Stock echange, but pro-