The Sentinel=record., 1913-01-28
ASKS STATE TO REGULATE NEW YORK STOCK EXCHANGE RY
 STRINGENT STATUTES.
WOULD PROTECT THE PEOPLE
Seeks Series of New Laws to Cover All Objectionable Features to Present Dealings in Stock
 And Bonds.

Albany, N. Y., Jan 27.-State sup ervision and regulation of the New York exchange and other stock ex- changes are advocated by Gov. Sul- ger in message sent by him to the legislature tonight
 The time is ripe in the governors opinion, for the state to step in and end "tlagrant abuses, shifty schemes and clever combinations to catch the unwary and to mislead the pub lic.' To effect this, he recommends enactment of group of laws, at least one of which will provide imprison- ment as a penalty for it's violation The laws, the governor says, should apply to certain practices which have been shown to exist by the Pujo com mittee of the house of representatives and other investigators.
 The testimony of some of the gov ernors of the exchanges Gov Sul- ger says, leaves no doubt in the minds of men Of judgment that the exchanges have been either incapable or unwilling to devise measures that will effective eradicate the evils. 1t
 
 it seems to be to devise the remedies. If the state negleets to do it's plain duty the state should find no fault if the federal government acts in the premises.
 Among the measures which Gov. SuizeT woulas haso snaced into faws are:
 A law to distinguish clearly p.oper transactions of purchase and sale from those that are the result of com binatlons to raise or depress artifi- cially the price of securities without regard to their true value or legiti- mate supply and demand.
 A law to prohibit brokers from sell ing backward and forward among themselves blocks of particular stock with intent to deceive or mis- lead outsiders
 A law to prohibit brokers from sell ing for their own account the same stocks they have been ordered to buy for their customers at the time the customers orders are executed.
 A law clearly prohibiting insolyent brokers from continuing to buy and sell after they become insolvent.
 A law making it criminal offense "to issue any statement or publish any advertisement as to the value Of any stock or other security, or as to the financial condition of any cor poration or company issuing or about to issue stock or securities where any promise or prediction contained in such statement or advertisement Is known to be false or to be not fairly justified by existing conditions"
 Gov. Sulzer also recommends, but leaves to the legislature for decls- ion, changes in existing laws and the enactment of new laws governing short sales, the hypothecation of se- curities. bucket shops, usury, (under which head he classes the raising Of call money rates to more than six per cent) the relations between eX- changes and the consolidation or eN- changes.
 In his message he says in part;
 That evils requiring immediate remedy exist is beyond dispute. These evils are easily discovered and readi- lv stated. but the remedies to be ap- piled require deliberate consideration and the most delicate adjustment 10 meet the situation so as to benefit the public at large and at the same time not disturb economic and indus trial conditions.
 Ut is demonstrated that the mem hers of the exchanges are aware Of these occurrences, but ignore them manifesting a surprising indifference to the public interest and to the dls- cretion of the exchanges which IS often besmirdhed by these vicious operations.
 If is now conceded by some Of the officials that gambling taint is pres ent in some of the transactlons-a concession that confirms the general oninion. It has been established that transactions, in their nature tlcu- tious. which makes manipulations possible. are carried on without seri ious attempts at restraint.
 "Apuses of the mechanisms and violations of just and equitable prin- ciples of trading are treated ienleht- lv instead of being vigorously con demned
 'The testimony before committee of tIhe house of representatives fur' ther shows that in cases where mem bers have been punished for extreme violations of the rules, 1t also indi- cates quite clearly that the rare habi' ual violations undisclosed because not investigated. The men who have been entrusted with the power to regulate the operations of these ex- changes have sometimes displayed in- excusable laxity in their duties to l the public. Since they have failed to