Arizona republican., 1913-01-28
Says In Message That New York Legislature Should Enact Laws Governing Methods and Protecting the Public.
SEES FEDERAL
 RULE COMING
Does Not Condemn Short Selling Except Where It Is Evident It Is Done to Catch the Unwary and Mislead the Public.
ASSOCIATED PRESS DIsPArcHl

ALBAN l JdIi / ZI.-AobSiNC f7oPNA iA'4oAA and regulation of the New York stock exchange and other stock exchanges is advocated by Governor SulZer in message sent by him to the legislature tonight. The time is ripe in the gov ernor's opinion for the state to step in and end the "flagrant abuses, shifty schemes and clever combinations to catch the unwary and to mislead the public"
 To effect this he recommends the en- actment of a group of laws. at least one of which will provide imprisonment as penalty for violations. These laws, the governor says. should apply to cer tain practices which have been shown to exist by the Bujo committee of the house of representatives. other inves- tigators.
 The testimony of some of the gov ernors of the exchanges" Sulzer says. leaves no doubt in the minds of men of judgment that the exchanges have been incapable or unwilling to devise measures that will effectively eradicate the evils It is now the obvious duty of the state. it seems to me, to devise remedies If the state neglects to do it's plain duty. the state should find no fault if the federal government acts in the premises"
 Among the measures Governor Sul- ger would have enacted are:
 A law to distinguish clearly the pro- per transactions of a purchase CT sale from those which result from combina- tions to raise or depress artficially the price of securities without regard to the value or a legitimate supply and demand.
 A law to prohibit brokers from sell ling backward and forward among themselves blocks of particular stock with the intent to deceive or to mislead outsiders.
 A law to prohibit to brokers from selling on their own account the same stocks they have been ordered to buy for customers at the time the custo- mers orders are executed
 A law clearly prohibiting insolvent brokers for continuing to buy and sell after they become insolvent.
 law making it a criminal offense to tissue a statement or to publish an advertisement as to the value of stock or other security or as to the finan- cial condition of any corporation or company issuing or about to issue stock or securities. where any prom ise or prediction contained in such a statement or advertisement is known to be false or to be not fairly justified by existing conditions"
 Governor Sulzer also recommends, but leaves to the legislature for it's de- cision changes of the existing laws and the enactment of new laws governing short sales the hypothecation of secur- tiles bucket shops and usIry under which head he classes the raising of call money rates to more than six per cent" and the relations between the New York exchanges and consolida- tion exchanges In his message he says in part:
 That evils requiring an immediate remedy exist is Beyond dispute. These evils are easily discovered and readily stated. but the remedies to be applied require deliberate consideration and the most delicate adjustment to meet the situation so as to benefit the pub lie at large and at the same time not to disturb the economic and industrial conditions It is demonstrated that tic llINlilDtIS or lle eNCndnBeS are aware of these occurrences. but ignore them manifesting a usurping indiffer- ence to the public and to the reputia- tion of the exchange which is often be- smirched by these vicous operations.
 Tt is now conceded by some of the officials that the gambling taint is present in some of the transactions and this concession confirms the general opinion.
 Tt has been established that the transactions are in nature fictitious which makes manipulations possible and are carried on without serious at tempts at restraint
 Abuses of the mechanisms and vio- lations of just and equitable principles of trading are treated leniently instead Of being vigorously condemned.
 "The testimony before the committee of the house of representatives, while it shows that in many cases the mem- bers have been punished for extreme violations of the rules. also indicates quite clearly their habit of evasions are disclosed because they are not in- Vestigated
 Men who have been entrusted with the power to regulate the operations o1 these exchanges have some times dis
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