The Washington times., 1913-03-01
PUNISHING THE EXCHANGES.


alleged to exist. If there be such combination,
dangerous approximation to it, as part of the CON
mittee believes, it is difficult to understand now,
destroying the public markets for securities, il
power is to be essened.
| These drastic measures are indeed suggested a
> means to enforce reforms which Federal authorit
is powerless directly to impose. But the attitude
hostility herein suggested, and the uncertainty o
accomplishing such results indirectly, make the pre-
+ posal one that must be examined closely.
!, The great exchanges constitute the meeting poin
of the buying and selling minds of the world. Abuse
may creep in. and doubtless there is need of NOR
regulation than has been applied thus far. The &C
ton of the New York Stock Exchange in settin
about to remedy some of its own defects may b
taken as admission that there is need for improve
ment in this direction
But the proposal to withdraw the use of the ma
and telegraphs seems to be aimed at destruction o.
the exchanges; and destruction of the exchanges car
be regarded as nothing short of destroying the only
markets yet devised in which transactions of such
vast scope and importance can be carried on.
| We have pointed out heretofore that the concen
tration of bank balances in great financial centers
chief of them New York, is not unnatural or
vicious condition 1t happens that the great incor'
poraed properties of the country are not dealt in
directly but indirectly. Men don't buy railroads, put
them in a wheelbarrow motor truck, and haul
them out home. The transportation system of the
country in its truest aspect is great unity. 1t must
be dealt in, bought and sold, somewhat as unity
There must be Capitalization of the market.
The people of Nebraska have several thousand
miles of railroads for their convenience. They don't
own those railroads They have been too busy buy
ing, developing and financing the development of
the great areas of lands in their State. Other people
have carried the business of providing them with
railroads. But the people of Nebraska, in the final
anayss-the people of any other State-must con-
tribute something like their share toward financing
their share of the railroad system. BY reason of
having these railroad facilities to help them develop
their lands, the people of Nebraska make money,
which they deposit in their banks The people, off
in New York and elsewhere, who are managing the
railroad interests that serve Nebraska, need money
to do it with so the money in the Nebraska banks is
inevitably drawn in part, to New York, to finance
Nebraska's railroads. The money of every other
State is thus requisoned to the financial centers to
do this service for all the States.
The New York Stock Exchange, the Wall Street
brokers' the banking houses of tine metropolis, don't
own the railroads. They are useful simply for the
purpose of pooling together a sufficient aggregation
of capital to finance them. Their ownership is wide
ly scattered 1t is dealt in speculatvely potatoes,
town lots and copper metal dealt in speculatvely
There may be abuses in connection with this specula-
ton; but destroy the business in order to reach
its evils would be most remarkable procedure.
WHAT has been said about the railroads of course
applies to every other form of business enterprise
that has grown to such proportions that its ncorpor
alton has become necessary in order to secure the
cooperation of enough capital to carry it on.
The greatest evil of the present method of hand
ling these aggregatons lies in the fact that they in
vite speculation One man thinks given stock is
going higher, and buys; another thinks it is going
lower, and SELLS If both of them knew much of
the truth about that stock as they ought to know
there would not be so wide divergence of opinion
and the range of speculation consequently its danger
would be greatly reduced.
President Roosevelt proposed to establish such
thorough system of publicity concerning concerns
thus dealt in, that their shares could be as accurately
appraised as are those of national banks. Close
supervision and full publicity have given the public
confidence in these securities. Speculation in them
has been largely eliminated Mr.. Roosevelt believed
that much the could be accomplished as to rail-
roads and great ndustrials, by like system of
supervision and publicity.
But with all that accomplished, the need of a
great marketplace for these securities would be in
nowise reduced. man in California who owns a
hundred shares of Union Pacific, and wants TO turn
it into cash for his business needs is able thanks to
the existence of the great markets which the ex-
changes afford, to make his deal quickly and with
assurance that he is getting what the marketa real
market, rejecting all the elements of cause and
effect-conceves his shares to be worth. If there
was no such market if he must 60 travelling around
the country hunting for private purchaser, and sell
without knowing whether he was getting what his
stock was really worth, he would be disposed not
again to invest in that sort of securities Thereupon
fhe means of Enancinp such great enerprSeS wouId