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.

HdtCIllIS TuDliC TulSe'
BY 3. c. FORBES.
The greatest industry in the United
States is-what7
Iron and steel making7
Weaving textiles and manufaetur-
ing clothing?
Railroading7
No.
INVESTIGATING ITS OWN AND
FOREIGN 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 eommitted-untiI, in other
words, it is too late.
II the Neto York Stock Exchange
is not to tCizen up through dry rot, II
ii is to Keep in front Of the march
of progress instead of continue to tau
Idmentdbly behind, il must bestU it.
self to safeguard Investors, ii must
arrange to Keep its finger on the pub
lie pulse, IL mast become the monitor
and not the sIaUe 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
done? How can the reforms you ad-
Vocate be brought about? Is it no.
the Governments business rather thar
ours to regulate the acts of corpora
tons?
Here is my first suggestion, o.
fered in all friendliness and with a &c
sire to assist, not assai:
Let the governors of the Exchange
appoint a commission of the leading
brokers and others, including offics o.
inside members of firms, who come
into personal touch with the invest
ing public, and have this commission
thoroughly investigate the whole sue.
ject. draw up recommendations for
remedial action and present them t.
the governors for consideration anc
adoption.
The Stock Exchange governors who
spend every day on the floor of the
institution ninglins only with others
similarly employed do NOT have their
fingers on the public pulse. They are
ignorant of throbbins public sent-
ment. They live in isolation, in a
professional, artificial atmosphere.
They buy and sell honestIy-and feel
that ends their duties. Their horizon
is circumscribed 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
tisticaI and information departments, |
those whose business it is to anaIyze |
securities and advise clients-alI 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 Huctuats in a way that en-
ables insiders to make easy fortunes
at the expense of outside holders.
Secretary Ely, of the Stock Elk
change, discussing the movement for
more frequent reports from corpora
tons, said yesterday:
The conditions surrounding large |
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 |
The committee feels that |
estimated returns would be much |
more undesirable for shareholders |
than awaiting the actual figures for
longer periods.
II directors give stockholders, say, |
once every three months, all the in
formation at command, detailed re.
ports would not be essential. Stock
holders do not ask the impossible. But
they do demand to share the knowI-
edge that comes into possession of
their representatives, tho directors, so
that the outsiders may not work in
the dark and the insiders in the light.
Certain governors have told mo that
it is none Of tho 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
Of bond and stock trading
done on the Exchange has dwindIed
abnormaIly and will continue to dwin-
die unless something effective be done