New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-03-20
DEFENDS THE EXCHANGE
S. P. Goldman Says Incorpora-
ton Is Unnecessary.

NO more honorable body Of men exists
anywhere in the world" is the character
ization Of the members Of the Stock EN-
change in supplemental report on the
proposed incorporation bill submitted yes
tcrday by Samuel i. Goldman at the re-
quest of the committee on legislation Of
the New York County Lawyers Associa-
ton. The report opposes the bill now be-
fore the state Legislature on the ground
that II will produce no beneficial changes
but positive harm Most Of the provi-
sions of the act it says. have nothing TO
do with regulating any practice Of the
Stock Exchange that may be the subject
Of legitimate criticism.
Special criticism is made OF the pro-
posed measure delcgating To the Superin-
tendent Of Banks the power to ex-
anime the books of brokers II is
pointed out that these books contain the
transactions of the members. and the
power of inspection could not legally be
given To the state Banking Department
even II it were desirable to DO So The
bill. Mr.. Goldman says, is not needed TO
enforce an honorable course of conduct
between the members OF the exchange
and he continues:
In pursuance OF the desire OF the menu
dealings clean and above board. trench
dous power is given their board Of gov
errors with the result that the board
is able 10 rule with firm and just hand
comparison OF the Stock Exchange
with an association whose activities do
concern the public would seem TO en-
pha size very strongly all the arguments
against compulsory Incorporation
The report states further that manipu-
lation of prices is necessary and proper
10 create a market for new securities
that big improvements and industries
cannot be accomplished unless large gums
are raised by the sale OF securities. that
improper manipulation can take place II
the exchange IS incorporated. and that
pyramidlng can largely be prevented by
the combined action Of brokers and
banks. The report also says
a number Of things done on the ex-
change which are generally considered
as illegitiInate are entirely proper and
necessary To the fixing and maintaining
Of prices Speculation j. necessary TO
steady prices There il nothing wrong
with trading Oh margin. II is as legiti-
mate as Duyius real property subject 10
mortgage When d man sells short IL Is
necessary FOR him 10 buy the stock at
some subsequent time. lie sells when
prices are high and buys when they are
low Short selling therefore has good
effect on the market
Mr. Goldman holds. also that the bill
e unconstitutional For substantiation he
refers % Article :. Section !. % the state
| constitution. which provides: NO mem
I her OF this state shall be de-
nllved 81 any II the rights or privileges
! occurred 20 any citizen thereof unless by
tue law OF the land. OF the judgment OF
his peers" II is also stated that the
measure conflicts with the Fourteenth
Amendment ~ the federal Constitution.
The right 10 maintain an exchange.
the report says is "A common law right.
and there being nothing about a stock eN-
change inherently inimical 10 the welfare
OF the public the Legislature has not the
power 10 prohibit individuals from main
tanning an exchange The bill in question
does not purport 10 regulate the right or
individuals 90 maintain an exchange II
distinctly md expressly deprives ndi-
viduals OF the right and makes IL mis-
dcmeauor for an Individual 10 transact
business as a member OF an exchange in