New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-04-14
MORE EXCHANGE REFORM
Law Committee Empowered to
Examine Stock Dealing.
BOOKS AND ACCOUNTS OPEN
Important Step Forward Taken
by Governing Committee to
Insure Supervision.

The governing committee or the New
York Stock Exchange took another i'm
portant forward step yesterday in the d.
rection Of reforming the methods of trans
acting business on the exchange and eX-
ercisinC a more effective supervision over
the acts Of members. Section Of Article
IL of the constitution. under which the gov
erning committee after each annual meet
ing appoints among the standing commit
tees "a law committee, TO consist of five
members. to which shall be referred all
questions of law affecting the interests of
the exchange" was amended by the addi-
ton Of the following clause:
1t shall act in an advisory capacity TO
the president when requested, shall repre-
! sent the exchange in conference with other
4 interests and is authorized and empowered,
whenever the committee shall deem it to be
| for the interest of teh exchange. to examine
/ into the dealings of any members of the
exchange"
No explanation Of the scope of this
amendment was obtainable at the Stock
| Exchange. The Hughes committee, in its
report to the Governor last June, empha-
| sized, in discussing several different phases
Of the activities of the Stock Exchange.
the necessity of the institution of
method through which wrongdoing might
be prevented and failure averted, and 1t
is apparently in line with these sugges-
tons that the powers of the law commit
tee have been enlarged 10 give that COM
mittee authority TO act upon its own initi-
alive i'm examining into the dealings of
any member of the exchange. Clothed
with these powers. the law committee
might, for example, have instituted an in
ouiry into the Rock Island manipulation.
r.rp nc MILD Of Ia Tarerr,-
ber through which severe losses were suf-
fered by many persons. and might also
have ascertained the facts concerning the
Columbus and Hooking pools. which did
not develop until after the widely looked
! Tor crash came. in which three houses
went down. and Censure for their part in
the manipulation was given by the gov
erning committee to a number of other
| firms.
! In discussing the proposal for incorpora-
ton of the exchange, the Hughes Commit
/ tee said that 1t RETAINED from advising
such step. i'm the expectation that the eX-
/ change would in the future take full ad-
vantage OF the powers conferred upon 1T 10y
it's voluntary organization and would be
active ia preventing wronSdoing such as
had occurred In the past
! The committee also recommended periodic
| examination and inspection of the books
and accounts OF members Of the exchange.
! pointing out that lit is generally only after
/ a member OF = firm Is oVertaken by oisas-
/ ter involving scores or hundreds Of lnno-
/ cent persons, and causing serious disturb
I ances. that tho exchange authorities take
/ action" and that while the severe punish
ment IS then melted out. in most cases the
vronEdoing thus stoned Cor. which has
~sfs.sT
might have been discovered under proper
system Of supervision. and the vastly pre-
ponderant value Of prevention over cure
demonstrated" The governing committee
in its present action has not gone 10 the
full length of requiring examinations Of the
books and accounts Of all members at
stated periods. but has placed the law COM
rnittee I'm a position to make such inquiry
whenever. in the judgment of that commit
tee occasion may appear 10 arise.
The law committee is composed of four
ex- presidents of the exchange. I. K. Stur-
eis. who Is chairman: Francis L Eames.
Rudolph Keppler and II. X. Pomroy, the
fifth member being J. T. Atterbury. tho
vice-chairman.
At its last meeting. fortnight ago, the
| governing committee amended the constitu-
ton 80 carry into effect three important
suggestions Of the Hughes committee. one
oblisinS broker who offers to buy or
sell say. 4 thousand shares Of stock. 70
accept bids for lots of q hundred shares;
another forbiddnE A specialist to buy or
sell for his own account securities placed
with him for disposal. and the third eX-
tending tho rule against executing orders
for employees Of members or Of the ex-
change TO include clerks Of banks. trust
companies, insurance companies and bank
ers The Governors committee also ad-
vised the abolition of the unlisted depart
ment which was ended on March 81 last,
and the governing committee yesterday
struck out the clause of the constitution
creating the committee on unlisted securi-
ties
There are only few recommendations OF
the Hughes committee which have not yet
been adopted by the Stock Exchange.
Among them is that suggesting the aboli-
ton or regulation of branch offices, that
p advising that the governing committee have
power to determine when a corner exists
and TO fix settlement price and that
recommending that the clearing sheets
be preserved for six years instead Of for
only a week, at present.