Evening star., 1914-02-04
Purposes of Incorporation.

Reasons for Incorporating and regulat-
ing exchanges We're summarized by Mr.
rntermyer as follows:
ITO prevent and punish the practice
of frauds upon the public through
manipulation. matched orders. wash sales
and like fictitious transactions. by means
of which apparent values are created for
.ecurities In the worlds markets.
ITO secure complete publicity of the
profits of bankers. brokers and inter
mediaries in the fotation of companies
and the exposure of all the salaries, COM
missions and other profits OF officers and
directors. through the control of the de-
partment of the exchanges for the listing
of securities, and TO prevent securities
that have once been listed from being
stricken from the list without notice and
the right of review.
Mr. Cntermyer declared that he had
never heard any plausible argument
against according the necessary power TO
discover ilegitimate practices of eN-
changes through access to books of the
members. 1T can he accomplished. he
suggested, by denying the use of the
mails to the quotations of the transac-
tions of public exchanges that are not in
corporated, and by requiring that the
books of ali members of such exchanges
be subject to inspection
For Public Protection.
He asserted that Incorporation and rigid
regulation of exchanges We're essential TO
the public protection. In making this
clain.' he added. lit is not necessary to
impugn the good faith and honest pur-
poses of the general body of the member
ship of exchanges. My contention is that
without the aid of Incorporation eN-
changes will be unable to put an end to
illegitimate practices. and that the best
element in the membership should well
come the proposed legislation.
John G. Miiburn. attorney for the New
York Stock Exchange: James B. Mabon,
its president. II. X. Pomeroy. former
president and w. C. Van Antwerp. one
of the stock exchange governors, also
appeared at the hearing.
Senator Weeks objected to the Pujo
money trust report being taken as the
basis for the committee TO urge stock
exchange regulation bill. saying much
was erroneous.
Tells of Personal Expenditures.
4 resent the suggestion that there
was anything unfair or partisan about
that investigation" declared Mr.. Inter
myer. SO great was the misrepresenta-
ton that the truth of the hearing is
just getting out Statements Were made
that the Investigation cost s250.o0o.
whereas it was known it cost only
800 ,0eo. i was criticised for my firm
receiving $4,000 for my eight months
service with the committee The facts
are | spent $4,000 of my personal
funds on the work, for which l was not
compensated" He added that he spent
$4,000 distributing 10000 copies of the
report after he failed to get the House
to print more than 1900 copies.
Mr.. Untermyer in taking up the manner
of doing business on exchanges stated
that it was the practice of new corpora
tions to issue securities have a syndi-
cate of bankers underwrite them. and
for the bankers to list the stock in the
stock exchange, and to give selling or
ders to one group of brokers and buying
orders to another to create a fictitious ac-
tivity of the securities to induce
the public to buy.
IF you go on the stand l shall ask you
some direct questions TO bring out your
personal knowledge on the subject an
nounced Senator Weeks.
Il shall not answer, for | do not intend
to divulge my personal relations with my
clients for the edification of this or any
other committee retorted MIR. Tnter-
myer.