Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1912-12-13
STOCK GAMBLING
|IP EXCHANGE
SAYS WITNESS
Chairman of Law Committee of
New York Pit Admits 1t Can
Stop Manipulation.

!.,, committee today that the eX-
60 .,ourd prevent both short selling |
'.'',' accumulation if it saw fit to do 50.
.,..tpess said that ne did not per |
anrroye of short selling and
t.r ,ornered by Samuel Untermeyer,
.,.oI. for the committee, as to why he
,arar urged this reform in his 30
,.ssrs of experience on the stock |
...,,5nge he said he was not reading |
,r ra,rures to the other people Of |
,be community"
''I I,1ts,.meyer asked him If ne knew |
Gina average daily transactions Of the
,.rsarg4 and he said he did not.
.nid your committee supply the !
,7.,,es commission with data on these |
.-91sae+ions?" asked Untermeyer.
OF don't remember. We gave them
.,.5s data" said Sturgis
r-7termever pointed out that the fig
rrss he had showed about an average
of 10000 shares yearly. Sturgis was
,ot sure that was right
0, an these transactions Is cents a
share commission was paid to brokers, |
e.s il not" asked UnternReyer.
Not on all Of them. Some of the
brokers may have been acting for thein4
.4.rss. Somewhere between one-quar-
for and one-haIf of the dealings were
p.obaby FOR brokers'
About Brokers' Rates.
sfurgfs said there were about 400 ac-
rive members on the exchange on busy
dsvs. He admitted that about one
third Of the active business was from
brokers'. He said the rate Of commits
sions varied a good deal, only So for 100
shares being paid in commissions on
the floor business. The varying sched
nile of commission rates was regulated
by the exchange. Where the outside
public was on both sides Of the trans
actions a tax of rs cents q share had to
be paid to brokers.
rs It not a fact that the price Of
securities has no effect on the size of
the commission"
Excepting mining stock below $40
par value, that is true said Sturgis.
Untermeyer then took up short sell
ing
In the main, short selling is specu-
iattve," said Surtgis.
Short selling is practically selling
something you haven't got. isn't it?'
asked Untermeyer.
YES" said the witness.
"Is 1t legitimate?"
'T think so.''
"Panio Makes No Differences"
IF a panic IS raging, do you think
its right to sell stocks short to depress
fhe market7'
Il do not think it's wrong. 1t Is
protection for men who have been
caught with a lot Of long securities,
and they are able to repair their cred
It's under such conditions
sturgis said his idea Of the defen-
sibility OF short selling was based on
the financial necessity of the person en-
gagged in such transaction. He said that
short selling in a normal market" was
question Of morals. He did not per-
sonally sprove of it under certain con-
ditions, and said he had never sold a
share OF stock short in his life.
Gould you not regulate short sell
insr"
Ut would not be practicable"
Wouldn't the brokers' books show
the transactions?"
Some tines
Ultimately Sturgis admitted the
brokers' books in New York would re-
veal all short sales. The exchange, by
periodic examinations of the books, !
could find out the extent of short sales
and manipulation.
He Never Met Issue.
"if the exchange wanted to forbid
short selling or manipulation, could it
DO so?"
The exchange has never met that
issue"
Have you urged its REFORM"
Its not my duty to read moral lee
lures to the other people Of the COM
munty."
Ontermeyer reviewed the arguments
ID favor Of short selling as a balancing |
loTce in rising market, but then came |
PACK to the question of gambling.
SVu tlllilh lllC IlOldl ODllQuE |
VI such transaction outweighs any
argument in its favor?" he said
Yes, I do. personally"
As matter of fact. it is mere
gambling is it not?"
Yes, very likely"
lAterneyer asked Sturgis il such
'"'sactions as the Hooking pool did
wv. nurt American credit abroad. I'm |
Lu2ooledly they did, he said In the |
',NlhS pool case stock exchange firms |
rio LOOK part in it We're censured, the |
ao Reckless Firms Suspended.
pu. they were not suspended. We're I
Hs,. "' urlns We're suspended because |
1 Went beyond their means. They |
sn.. reckless. The others were not
tglt g.oeo because they kept within
terr,.. " 'lhesS could not agree with I'm |
.h,,' ts TO the distinction the ex- |
sr,'-. mad found between those Cen /
H. and those suspended
ar ~ meyer showed Sturgis figures !
Wa KING assets. and asked If there |
vC.. amy good reason for boosting the
o..., ...IlN 1t was "a very poor invest |
,v. The Witness said.