Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-07-07
STOCKEXCHANGE
SHOULD PROBE
OWN AFFAIRS
Forbes Suggests Appointment of
Investigating Committee and
Watching Public Pulse.
BY 3. c. FORBES.

The greatest industry in the United |
States is-what7
Iron and steel making?
Weaving textiles and manufactur.
ns cIothins2
Railroading?
No.
INVESTING ITS OWN AND FOR |
EIGN MONEY.
. This, the most important, is the |
least studied and worst MANAGED |
business in the country.
The protection of investors is no
hody's duty. The Government can not |
start criminal proceedings until crime |
has been committed-unti, in other |
words, it is too late.
If the NetO York Stock Brchange |
is not to tcizen up through dry rot, If
it is to Keep in front Of the march
Of progress instead Of continue to tau
iamenta6Iv behind, it must besttr it.
oVts ~ ctJt0Ni"u btbtbEBf o. u WN6t !
arrange to keep its finger on the pub /
lie pulse, ii must become the monitor |
and not the SLavc Of corporations is
suing securities to the public.
! have been asked by governors of
the Stock Exchange and others:
What do you suggest ought to be
done7 How can the reforms you ad-
vocate be brought about7 Is it no:
the Governments business rather thar |
ours to regulate the acts of corpora
tions?
Here is my first suggestion, Of
fered in all friendIiness and with us.
sire to assist, not assail;
Let the governors of the Exchange
appoint a commission Of the leading
brokers and others, including office or
inside members of firms, who come
into personal touch with the invest
ing public, and have this commission
thoroughly investigate the whole sue.
ieet. draw up recommendations for
remedial action and present them to
AlG 9ON0IHOFb Ut SOEolIGt dAlOU dUC
adoption.
The Stock Exchange governors who
spend eVery day on the floor of the
institution ninsIins only with others
similarly employed do NOT have their
fingers on the public pulse. They are
ignorant of throbbing public senti-
ment. They live in isolation, in a
professional, artificial atmosphere.
They buy and sell honesty-and feel
that ends their duties. Their horizon
is cireumscribed by the four walls of
the Exchange.
The brokers who have to meet the |
customers, the men who have to pa
city those who buy listed securities
that 90 wrong, the heads Of the sta
tistics and information departments, |
those whose business it is to anslyze |
securities and advise elients-al these |
are daily confronted with the great
problem of protecting investors, Of
collecting Trustworthy information, of |
trying to peer behind the barriers |
raised by many corporations whose
securities fluctuate in way that en-
ahles insiders to make easy fortunes |
at the expense of outside holders.
Secretary Ely, of the Stock Ex- |
change, discussing the movement for
more frequent reports from corpora
tons. said yesterday;
IL L.
business interests are so varied that |
some corporations can not make ac-
curate reports more frequently than !
'once a year. Such corporations hav-
ing vast interests distributed over the |
world are unable to make returns ex- |
cept upon definite inventories taken |
annually. The committee feels that |
estimated returns would be mucn |
more undesirable for shareholders |
than awaiting the actual figures for
longer periods.
If directors give stockholders, say, |
once every three months, all the in
formation at command, detailed re-
paTts would not be essential. Stock |
holders do not ask the impossible. But |
they do demand to share the knowl- |
edge that comes into possession of |
their representatives, the directors, so
that the outsiders may not work in
the dark and the insiders in the light |
Certain governors have told me that
il is none of the Exchanges business
to see that investors receive informa-
ton. The sooner they make it their |
business the brighter will become the
prospects for the Exchanges future
none too bright at the moment The |
proportion of bond and stock trading |
done on the Exchange has dwindled |
abnorr'alIy and will continue to dwin-
die unless something effective be done. |
have only scratched the surface
to-day. The subject will be gone into
-. - JetaiI Nv and Inv