The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-21
UNTERMYER'S HAND
IN EXCHANGE BILL
owen Measure Word for Word
for Pujo Committees
COunsel's Plan.
STOCK BROKERS TO FIGHT
Think Incorporation a Menace
to Public-Margin Rule
Ineffective.
STOCK BROKERS TO FIGHT

Examination Of the Owen bill aimed az
is a duplicate of the Samuel Un,ermyer
bill out Of the Pujo report. differing only
In three words.
The Owen bill adds the word that" In
the opening section. II changes the words
''per cent" to the more Senatorial "per
centum" and Inserts a harmless "of' in
the first paragraph OF the second section.
The wholesale acceptance by Senator
Owen OF the Untermyer plan TO annihilate
stock exchanges was therefore accepted by
some of Wall street yesterday as not
much more than tho formal effort of the
Senator to repay an obligation to Mr.
Untermycr for his support and advocacy
OF the currency bill. II was fc,t that .ho
bill will be well torn apart before any
actual legislation will be passed.
Leading stock Exchange members will
60 to Washington when the bill comes up
for hearing In the Senate Committee ON
Banking on February TO present the
Stock Exchanges position.
This Is tho attitude OF the exchange, in
formally stated yesterday by one of the
governors
The exchange rejects the proposition for
incorporation and likewise rejects the al
tentative scheme Of the bill for regulation
by the Postmaster-Ceneral on the ground
that Incorporation reduces authority over
its members and weakens the protection
the public has In n self-supervision many
more times Intelligent than a statute
could be-
Incorporation has been proved failure
II Is held by the Stock Exchange, by the
experience OF Germany. which incorpor-
ated Its exchanges in 1896 and has been
undoing the Incorporation ever since. A
royal commission in England recon-
voluntarily apply for a charter. but II has
never been done. In this country the
Hughes commission went on record
against II and at Albany last winter in
corporation was defeated by an over
whelming vote.
Manipulation OF prices was the chief
argument for the friends OF incorporation.
In the last year the Stock Exchange has
passed stringent rules forbiddlng its men,
bers to manipulate or accept orders from
outside operators who are known to be
manipulating prices. These rules have
been enforced by n business conduct COM
mittee which has investigated members
books. The reduced volume OF transac-
tons Is cited In evidence OF abolition OF
manipulation
Manipulation IL felony under the State
law passed last year There In no need.
therefore, for Incorporation to prevent
II, Il 10 held.
The position OF the Stock Exchange IL
further divided into two main arguments.
II IL held that the big duties Of regula-
ton Of issuance or corporation securities
through listing requirements imposed by
the Dill are not matter OF Stock Ex-
change concern Such regulation. II Is
held. Is purely the work Of the Govern
rnent. This il the case In England.
through the companies act. which regu-
lates security issues even to the point Of
the literature issued to advertise them.
The other main argument OF the ex-
change will be that the bill in fastening
regulations Of severe nature on the ex-
changes 10 depriving individuals Of the
right OF contract and II discriminating
against members Of exchanges in favor Of
non-members.
1t 10 also held that tho regulation re-
curing 20 per cent margin OF market,
instead OF par. value will drive speculation
and Investment into the weaker low priced
Issues Of email and doubtful value in
stead OF In the higher priced securities
OF established value. The wording Of this
section makes a 20 per cent. cash re-
quirement only good for ono day. not
preventing q customer from removing his
cash the day after purchase and con-
tinuing to carry his stock on credit. II on
the other hand a continuous margin of 20
per cent. should be required II would
mean that decline OF one point would
wipe out q customers account.