The Washington herald., 1914-02-07
change STARTS
Fight ON BILL
Owen Measure to Regulate
Stock Market Does Not
Meet with Favor.
CORNERS" NOT LIKELY
Proposed Trade Commission and Ex-
tended Power to !. c. c. Held to
Be Sufficient to Needs.

With the exception Of q summing up
of the objections to the Owen bin.
framed to regulate stock exchange
transactions through the medium OF
Postoffice Department surveillance, the
case of the New York Stock Exchange
before the Senate Committee on Bank
ing and Currency was concluded yester-
day. Next Wednesday John g. Mflburn.
counsel for the exchange, will sum-
marize the objections OF the exchange
and present an argument against the
bill in general and specific terms
The principal witnesses Of yester-
days hearing were Charles A. Conant.
financial expert and Harry X Pomroy'
former president Of the stock ex-
change.
Mr. Conant's presentation of the stock
exchange side of the argument was
statement Of the value Of the exchange
as q price fixing and market providing
medium, which he characterized as in
dispensible to the preservation OF the
democracy of investing oportunities
The elimination of the stock exchange
as the central market for speculative and
investing securities of all sorts for the
United States would. Mr.. Conant feared,
result in the creation of a situation sim
liar to that which exists in the market
today for unlisted bonds of all classes.
Mr.. Conant explained that without the
continuous ebb and flow of security
prices presented by the stock exchange
as a going concern purchasers and sellers
of all forms Of securities would be COM
PEELED to resort to banks and investment
houses for the purchase or disposition OF
their stocks and active bonds. The re-
suit would be a divergence of the bid
from the offered price, which would tend
slowly to restrict the market.
The Owen bill was characterized by Mr..
Conant as a roundabout and clumsy
way Of getting at the problem of honest
stock and bond valuations According
to his view. proper corrective legislation
regarding the inherent work of Sc
curities should be applied in another d.
rection: namely, at the corporations |
themselves
"Corners, Not Possible.
Mr.. Conant thought that the pending |
trade commission bill framed to regulate |
the character of security issued by in |
dustrial corporations and to control their /
conduct. coupled with the projected bill
empowering the Interstate Commerce
Commission to regulate the issue of Sc
curities of all classes by the railways and
other common carriers, furnished all that
is needed.
The necessity for the preservation of
the privilege of "short-selling," Mr..
Conant insisted was important and i'm
perative.
Senator Shafroth here interrogated Mr..
Conant as to the danger of short-selling
Greeting corners in the market, at
which Mr.. Conant volunteered the belief
that since the Northern Pacific panic OF
May 9, 1901. there had not been an actual
corner in the New York securities mar
ket He did not believe that the de-
veIoped condition of trade and securities
during the past ten years had left open
opportunity for further performances
along this line.
Mr. Conant cited instances and gave the
committee an analysis of the difference
between speculation and investment.
1T is entirely wrong" said Mr.. Conant,
ton and investment with morality or i'm
for the chsracterizing adjective
Of either. 1t is not proper to say that
investment and speculation, either of
them, are right or wrong. Speculation is
right and necessary. 1t is
only erratic. baseless, and insuficiently
considered speculation that is evil. and
the success or failure OF the speculative
must not be tal>en as the
index of its morality"
Gun Too Big for Bird.
the view that the Owen bill tended to
Ct the finances Of the United States. He
considered the presentation Of the bill as
peculiarly inopportune at this time, in
view Of the adjustments OF business to
meet the changes in our financial sys-
l,v&