New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-04-14
BIG EXCHANGE ACCUSED
MIR. Kendall Charges Monopoly
in Bank Note Practices.
TOOMBS URGES RESOLUTION
Assembiyman Sees No Hope OF
Reform from Inside the
Organization.
-Rr re,er-ar., 70 Tie Tribune.


Albany. APRIL TS.-Charges Of mcnopoliz-
ing practices in connection with the bank
note business were made against the New
York Stock Exchange this afternoon before
the Assembly WAYS and Means Committee
by George II. Kendall president OF the
New York Bank Note Company. He made
them In advocating the Toonibs resolution
providing Tor an investigation OF wan
Street by legislative committee. He de-
clared that the stock listing committee OF
the exchange would not list a stock unless
the certificates We're supplied by the Amer
lean Bank Note Company The American
Company. he said. and subsidiary COM
panies were owned by members of the
STICK Exchange. and the prices it charged
were double the amount which would yield
an ordinary profit. NJ Kendall believed
that this state of affairs WAS a matter for
legislative investigation.
The introducer Of the resolution declared
that the Governors commission which in
vestigated Wall Street was in position 20 do
Justice 10 the situation. lie said:
Those who depend on the board Of gov
ernors of the New York Stock Exchange
for instance. 10 reform that organization
are raising false hopes within themselves:
for as Samuel Untermyer in his recent let
ter to Senator Bracket said. II is expect
ing too much Of human nature to think
that Il business organization will regu-
late itself against its own interests. This
board Of governors has permitted gross
abuses and even criminal practices 10 con-
tinue without restriction. anC in some in
stances has even encouraged them. In no
other civilized country and in very few
other states Of this country would this con-
dition of affairs have been allowed to con-
tinue.
The many bills of varying nature relat-
ing to the Stock Exchange and others and
the complicated nature OF some CT the
needed reforms accentuate the necessity
for an investigation by the state, so that
justice may be done in absolute equity 10
the public as we'll as to the important busi-
ness interest concerned
Some Of the reforms which Mr.. Toombs
declared should be enacted into law are
these:
All the exchanges should be incorporated.
In the case Of "A corner. exchange govern
ors should be compelled to fix settlement
price in order TO save innocent purchasers
from injury or ruin.
Members of stock exchanges should he
compelled 10 have their books audited -FOUR
times year by certified public accountants
and the results Of these examinations made
public in some effective way.
The listing requirements and practices az
stock exchanges should be controlled in
some degree by law and subject to review
BY the courts in every detail, which is not
now the case.
Brokers should be penalized by law for
reporting a sale on an order by Gus
toner when the sale IS not actually made
and the trading on stock exchanges should
be done on the basis Of a reasonably small
unit.
The hypothecating, lending and other
uses OF customers securities held By p'o-
kers should be rigidly restrained.
Precautionary restrictions should De
placed on the use Of banking funds and
speculation by big financial interests
The practices OF organizers and pro
motors. the reorganizers and the receivers
Of corporations require closer restriction
than is had under the existing laws.
The New York stock Exchange authori-
ties refused to make any comment on Mr..
KendalTs charges that the American Bank
Note Company has a monopoly from the
stock Exchange OF the engraving OF all
securities dcals In on the board other than
TO say that the work OF any company that
was satisfactory to tho committee on stock
list would be accepted.
\ representative OF the American Bank
Note Company said that thu matter was
one for the Stock Exchange to decide and
that The committee on stock list was alive
TO the interest Of the exchange in accept
ing only such work rs could not be readily
DUPLICATED and that was properly safe
guarded lie added he had no doubt that
II other companies besides tho American
Bank Note Company could conform 20
these requirements the committee on stock
list would accept their work.