The sun., 1913-11-27
EXCHANGE TO MAKE
MORE RIGID RULES
Would Safeguard Public by
Closer Supervision of
Corporations.
GREATER PUBLICITY URGED
Resolution for Committee TO
Make Special Study Of
Problems.
GREATER PUBLICITY URGEI,

The board OF governors OF the Stock
Exchange placed itself on record yester- |
day as desiring 20 cooperate an fur as
possible In the protection of the invest
ing public against capitalization and
secrecy In regard to the exact conditions
OF corporations. II was resolved that
President Mabon appoint a committee of
hve or more to make u study of corpora to
organization with view to increasing
the safety Of American investments
The resolutions we're as follows:
"Whereas the questions involved in
the incorporation. organization, promot ion
and capitalization OF corporations and
the notation of their securities vitaily af-
feet the securities listed on the New York
Stock Exchange as well as the great guam
tity OF securities not 80 listed, and
whereas il Is the desire OF this ex-
change TO cooperate as far as possible in
bringing about the adoption of uniform
measures FOR the greater projections of the
Investing public through more careful su-
pervision OF corporate organizations. with
greater publicity and fuller and more fre.
Quent reports OF operations than has been
customary with many companies in the
past. now. therefore. be II
"Reso'red, that committee Of five or
more he appointed by the president to
make the above mentioned matters the
subject OF special study. with the object
or aiding to such solution of these Ques-
tiOns a. will tend to increase the safety
and integrity Of American Investments and
at the same time afford every encourage
ment to legitimate enterprise. Said com.
mitee shall report from time to time to
the governing committees
MembwS OF the exchange have long
felt and have often discussed the ne-es-
sity OF legislation in this country similar
TO the British companies act. or di-
rectors liability law. which would tehd
to obviate the scandals due to overcapi-
talisation tho concealing OF the true state
OF corporate finances and the lack OF fire.
Quen: reports. England. In her British
companies act. has a provision which
places the responsibility for ev;lsionsNpf
that law where they should rest. but
there ie no such provision in this country.
According to officials OF the exchange
the proposed cOmnlitt.ee Is not formed in
criticism OF the listing committee nor will
1t cooperate with that body to any grea,
extent The main purpose OF the new
committeee will IN TO keep itself in
formed as to whatever corporate organi-
2ation Is going on and to render informa-
ton to leTisla tors. investors and the pub
lie on request.
The Stock Exchange has suggested to
many corporations that they make quar-
terly AZ we'll as annual reports. Many
industrial concerns. II is said. have
agreed 10 comply with the exchanges
wishes.
The forming Of this new committee. oc
cOrdinR to opinion in Wall Street, is the
direct result OF issues Of stocks nj high
v values which shortly after their sale sut
fered heavy declines Among such Sc
cur!tisr suggested were those o! NJ. Ru-
mely Company. Mexican Petroleum Com
parry and the Inter irrational Agricultural
Corporation The testimony brought out
in the Interstate Commerce Commits sion
! hearing in ST. Louis relating 10 Frisco
mattere not long AGO il believed to have
had weight with the exchange and to
have Influenced the more progressive mem
bers 70 take steps to prevent further loss
To investors and further spread OF sus
picon regarding Investments,
The work OF the committee Will no; be
| retroactive II has not been decided as
vet Just what line the committee will pur-
sue. as that will be left open TO the men,
bers composing il.