Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1912-12-27
New York Must Act.
Editorial in the New York World.


This committee, in retaining from ad
vising the incorporation of the exchange
does so in the expectation that the ex.
change will in the future take full advan.
tage of the powers conferred upon il by
its voluntary organization and will be
active in preventing wrong-doing such as
has occurred in the past. Then we believe
there will be no serious criticism of the
fact that 1t is not Incorporated.
If, however, wrong doing recurs, and it
should appear to the public at large that
the exchange has been derelict in exerting
the powers and authority to prevent it, we
believe that the public will insist upon the
incorporation of the exchange and its sub
lection to State authority and supervis-
ion.-From the report of Governor Hughes
Wall Street Commission.
Three years five months and twenty
seven days have elapsed since this report
was made public. What has the New York
Stock Exchange done to reform itself or
its practices2 How active has it been "in
presenting wrong doing such as has oc-
Cured in the pastH"
The testimony before the Pujo committee
is the answer to these questions.
The Stock Exchange is a wholly ire
opOilolDiC llotltutlOIls AS Ollt vi
presidents testified yesterday, The mem
bers have duty to each other. The Stock
Exchange has no duty" But its members
are permitted to manipulate the price of
securities in which the public has invested
its savings. By means of their relations
with the chartered banks they practically
fix the rate of interest which legitimate
industry must pay for its loans. They are
nnrD1iffad fnFthar n HrnNu tho of
the entire country into New York for their
own use in manipulating fictitious stock
markets which they create. In times of
stringency or panic the United States
Treasury itself has to be placed at the
disposal of these men in order to mini
mize the damage with which gambling
menaceS legitimate business.
When John Doe and Richard Roe and
their associates organize bank with a
capital of $4,000 they must secure a
charter from the State or the National
Government. They must subject them
selves to inspection and supervision. If
they engage in practices which are for
hidden by law or which are considered
highly detrimental to the security of their
dep0sitors, Government steps in and takes
possession.
Dul the view IOTh OtOCh EACnuIlbe eAeT-
cises powers over finance that State and
Nation alike have denied to responsible
bankers. 1t exercises powers over public
prosperity that are denied to responsible
bankers. II can make and unmake prices,
it can employ the money of the people to
sustain its quotations and 1t can compel
the United States Treasury to protect its
operations; yet it recognizes no authority
of law or government over its transactions.
This is the only civilized country in the
world in which the organized banking sys-
TEN of the people is made an integral part
of the machinery of irresponsible stock
gambling This is the only civilized coun-
try which permits the savings and pros
perity of its people to be made the football
of stock speculation. II is the only civil
lized country which would permit an in
stitution that exercised such power over
industry and credit and confidence as the
New York Stock Exchange exercises to
hold itself above all governmental authority
and supervision.
New York's duty is not merely to itself.
1t is to the whole country, The time has
come to carry out the warning of the Hughes
commission and subject the Stock Elk
change to the same supervision and con-
troll as that to which the State banks and
trust companies are subjected.