The Birmingham age-herald., 1913-01-28
Sends Message EmbOdying
Views to New York
Legislature
TIME TO PUT A STOP
TO FLAGRANT ABUSES
Exchanges Have Been Either In
capable or Unwilling to Devise
Measures to Eradicate Evils,
Says New Executive

| Albany, n. Y. January 2s-State SUI
pervision and regulations of the New
York stock exchange and other stock
exchanges are advocated by Governor
Sulzer In a message sent by him to the
Legislature tonight.
The time is ripe. In the governors
opinion. for the state to step in and
end "flagrant abuses. shifty schemes
and clever combinations to catch the
unwary and to mislead the public To
effect this he recommends enactment
of a group of laws, at least one of
, which will provide imprisonment as a
penalty for its violation. These laws
the governor says, should apply TO GER
tain practices which have been shown
| to exist by the Puio committee of tho
| House of Representatives and other in
vestigators
! The testimony II some OF the gov
ernors of the exchanges" Governor
Sulzer says, leaves no doubt in the
minds of men of Judgment that the
| exchanges have been either incapable
or unwilling to devise measures thar
| VIII effectively eradicate the evils 1t
is now the obvious duty of the state,
1t seems to me, to devise the remedies.
III the state neglects to do It's plain duty
the state should md no fault II the
federal government acts in the prem
| ises."
! Measures Favored
Among the measures which Governor
Sulzer would have enacted into law
are
| A law to distinguish clearly proper
| transactions of purchase and sale from
hat
ations to raise or depress artifieially
the price of securities without regard
to their true value or legitimate sup
Ply and demand
| law to prohibit brokers from sell.
ing backward an1 forward among
| themselves blocks of a particular stock
with intent TO deceive or mislead out
slders.
| 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 arc executed.
| A law clearly prohibiting inso1vent
brokers from continuing to buy and sell
after they become insolvent.
| law making it a criminal offense
to issue any statement or publish any
| advertisement as to the value of any
| stock or other security or as to the
company issuing or about to issue
stock or securities, where any prom
ise or prediction contained in such
statement or advertisement is known
to be false or to be not fairly justified
| by existing condition"
Laws for Short Sales
Governor Sulzer also recommends
but leaves to the Legislature for de-
cision changes in existing laws ana
t1aa eIf Of
short sales. the hypothecation of secur-
| tiles, bucket shops. usury (under which
| head he classes the raising of call
money rates to more than per cent?.
the relations between exchanges and
the consolidation of exchanges.
In his message he says in part:
That evils requiring immediate rem
edy 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 situa-
| tion so as TO benefit the public at large
and at the same time not disturb eco
economic and industrial conditions.
1T Is demonstrated that the members
| of the exchanges are aware of these oc-
| currences. but Ignore them; manifesting
o surprising indifference TO the public in
| terest. and to the reputation of the ex-
| changes which is often besmirched by
| these vicious operations. 1t is now con-
ceded by some of the officials that gam
bling taint is present In some of the trans
actions. 3. concession that confirms the
general opinion. II has been established
that transactions In their nature fictitious
which make many manipulations possi-
hle, carried on without serious at
temptS at restraint.
Abuses of the mecha nisms and viola
tions of just and equitable principles OF
trading are treated leniently instead Of
being vigorously condemned
Evasions Are Habitual
The testimony before a committee of
the House of Representatives further
shows that in cases where members have
been punished for extreme violations of
| the rules, 1t also indicates quite clearly
that there are babitual evasions. undis-
closed because not investigated. The men
Continued ON Page Nine)
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