The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-03-31
REFORM IN STOCK EXCHANGE
1000 SCARE BIDDERS WUST
TzRR AIRY PART IN nos.

oeher nule Elats me 8wtnMlsng special
be-nAnlk ClsrMa' AeoSunas Noe % -
Taken wlehSgt EmUisysrs' csasent.
9hs man with ths rcd ns1lktis. the US-
sCrupulous specialist. tho eavssdrOppang
olerk Of q nnsncial institution or broker-
age house and the lAundryman we're put
out % buainsss by the governors % tho
Mes Work Seock Exchange yesterday.
Unexpectedly but emphatlcaIly and dras-
tically the governors put into edscs
amendmsnts 10 the rules more important
than have before been made. az any o1e
time sincs the constitution ofsthe exchange
Wa adnpssd I'm 1877
These new rules. together with others
previously adopted. carry out the recon-
msnds4ions made by the. commission ap-
pointed by Gov. Hughes q year ago with
q solitary exception. The commission
recommended that very high margins
be enacted on all accounts. That recon-
mendaaion has not besn formally enacted
In the Stock Exchange bylaws or rules
for the reason that the commission sug-
gested n minimum OF 70 per cent. FOR
Enargined account. IL was considered
unfair TO purchasers with high credit
and abundant resources that this be made
n rule. A man Of great wealth who teas-
Eraphed an order from out OF town would.
for instance. he estopped by IL. Put the
governors a year ago complied with tho
spirit Of this Recommendation by passing
the word around that all accounts muss
be amply protected and that under no
circumstances must q firm do business
In advance Of Ii resources. This I'M
written rule has been enforced on several
occasions since that time. Twice viola
tions OF il have been visited with expui-
sion.
The exchange" said the Hughes COM
m ission. nov has q rule forbiddinG any
member to deal or carry an account Tor
q CLERK or employees OF any other member.
This rule should be extended 40 a. 10
prevent dealing for account Of any cleTa
or subordinate employee Of any bank.
trust company. insurance company OF
other mOneyed corporation OF banker
The arst OF the nee rules adopts this
recommendation and IL followed BY an
other rule designed to make 1t incumbent
upon every broker to enforce L. The
rule reads a. follows:
That the n king or carrying OF a spe~a-
latlve account, or the nking OF specula-
tive tnnsaction. In which a clerk Of the
Iexrhanes or OF q member Of the exchange
or OF a bunk. trust company. banker or
inSu rance COMPANY u directly or indirectly
Interested. unless the written conSen' rf
the employer has been first obta net. shall
- deemed an act detrimental 20 the In
terest and welfare Of the exchange.
That every member OF the eNchR nge be
required 20 use due diligence to learn the
essential facts relating To every account
accepted by himself or by his clerks Or
Representa- ttye- and also relating to the
use Of a name for the account other than
that OF the party Interested.
Another new rule Is designed TO correOt
a system which has greatly facilitated
manipulation Of stocks. a. in the Hooking
pool. For many years 100 shares has
been the unit OF trading. hut a broker
Offering TO buy or sell go shares, for
instance. has not been obliged to take or
give any fraction of his bid or offer in
blocks less than 600 shares. Il has re-
suited from this custom that a broker
having 100 shares Of real stock 10 sell
for a customer has been obliged to stand
idly by while manipulators were trans
ferring between themselves bag blocks
OF stock and either lowering or advancing
prices.
On that Saturday morning two years
ago. for instance. when the since defunct
firm OF 40. Brown A Co. traded in 1. 500. 600
shares OF stock in two hours the TRANSACT
tons were in big blocks and designed 10
match after the fashion Of tho Laundry
work devised by Munro A Munro. stimuli
taneous buying and selling orders were
given TO brokers In the same stock and for
the same large amount. The brokers
might execute these orders together and
did 90 execute them while q broker was
trying to buy or sell small lots nc prices
more advantageous 70 the buyer or seller
than were their prices. But the man
with the big order was looking for the
man with the red necktie' and entirely
ignoring tho small but legitimate business
Tho new ruls 10 % worded that such
practices will be impossible In the fut,zrs.
Il provides that all bids or offers for
lots larger than Ico shares shall be con-
adhered bids or Offers for 100 shares or
any multiple thereof. II . broker Offers
TO cell 600 ahArss &a par he must take 100
shares IL IL 10 offered 20 him arst. The
rule b carefully and explicitly formulated
a. follows:
That ,hs roeoGnissd quotation on ssoeks
shaIl BE- public bids and offers on lots of
100 shares
All bida ara offers on larger lots shali
- eonsidsred 10 be for any part thereof Ia
lots Of 100 shares 90 Of niuitiplss thereof.
whether 80 60 Ated IN the bid or ofIsy or act.
n I'D II made for . larger lot % stock
ab owe the prize AZ which smaller lots ere
offered. or u q ~ ansacvion h made In q
larger lnt shove the pTiea &C which smaller
loes are offered. such bidder ~ buyer shall
be- compelled 70 buy any ~ all Of the Nmailer
lots which we're publicly offered AZ tho
time At the lower price up TO the amount
OF the bid for tho larwer Int II the bid for
the larger loo ~ accepted and tho buyer 10
unwilling to buy more the seller mUst give
MP Ia tire Tnembern Who were pubiiriy odcS-
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