The Washington herald., 1910-03-31

New York. March 3o-The New York
Stock Exchange to-day put into effect
amendments to the rules more important
and salutary than have before been
adopted at any time since 1897.
These new rules, with others previously
adopted. carry out the recommendations
made by the commission appointed by
Gov. Hughes a year ago, with a soil,
tary exception.
The commission recommended that high
margins be exacted on all accounts.
That recommendation has not been
formally enacted in the stock exchange
by the laws or rules for the reason that
the commission suggested a minimum OF
20 per cent fer a margined account II
was considered unfair TO purchasers with
high credit and abundant resources that
this be made rule.
Would Extend the Rule.
THE exchange" said the Hughes
commission, NOW has a rule forbidding
any member to deal or carry an account
fer a clerk or employee OF any other
member. This rule should be extended
so as % prevent dealing for account Of
any clerk or subordinate employee Of any
bank, trust company, insurance COM
pany. or other moneyed corporation or
banker.
The first of the new rules adopts this
recommendation and is followed by an
other rule designed TO make it incum-
bent upon every broker 10 enforce IL.
Another new rule is designed to correct
a system which has greatly facilitated
manipulation Of stocks. as in the Hooking
pool For many years 100 shares has
been the unit Of trading. but a broker Of
fering to buy OF sell 1000 shares, for in
stance, has not been obliged 10 take or
give any portion OF his bid or offer in
blocks less than 1000 shares. It has re-
suited from this custom that a broker
having 100 shaIfs of real stock to sell
for a customerfhas been obliged to stand
idly by while manipulators were trans
Eerring between themselves big blocks of
stock and either lowering or advancing
prices.
Such Practice Impossible.
The new rule is so worded that such
practices will be impossible in the fu-
ture. II provides that all bills or offers
on larger than 1OO-share lots shall be
considered a bid or offer for 100 shares or
any multiple thereof. If broker offers
to sell 1000 shares at par he must take
100 shares if it is offered to him first.
The third and most important Of the
rules eOrrects that abuse of which COM
plant has been lo6dest and defense the
weakest. II relates to the business of
the specialist. the broker who executes
orders and often makes a market for
various stocks. particularly those in
which trading is not at all active.
There are at least two specialists in
every stock on the list Few stock ex-
change houses have more than two floor
members. and they cannot execute per-
sonally all the orders for their firms.
They cannot be in two places at once,
and must turn over part of their BUSH
ness to other brokers
Nips the Specialist.
Inactive stock orders ordinarily are
turned over to specialists. who are
around the particular posts throuehout
the session, and are thus able TO catch
every bid and offer that is made.
Up TO the present there has been no
law TO prevent the specialist from buy
ing little stock for his own account
when he got an order from somebody
else to buy some, The specialist could
buy it for his own account and then. sell
it at a higher price TO his customer or
to the customer Of the other broker.
Also two specialists between them could
swap big blocks Of stock back and forth
and entirely ignore the broker or Gus
toner who has something real to buy
or SELL They could keep up the daily
quotations of q stock without actual