New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-02-13
Untermyer Tells Senator'S
This Is Real Purpose OF
Owen Bill.
MEANS REGULATION
BY LEGISLATURES
Counsel for New York Stock tx
change Points Out Objections
10 the Measure.
From Tho Tribune bureau

From Tho Tribune bureau -
,.,..r.or Feb State regulation
=, .,ocl exchanges. with disbarment rom
.,,I,.s nenalty unless tho stano"i Il
n =. e, ~ federal law Is con'pl'o' -"
r.sS disclosed to-day as the real pu'
81 the Pujo-Owen hill ny Samuei ".e We
r,v.r before the Senate Banking aho N"'
rencv Committee.
y tho pcnding measure IS passed, ~,
cordirc 70 Mr. Untermycr. the Ne"
exchanges will be regulated 10y inc Log,
is,ire n Albany-one 81 the reasons CIV
vanced against the bill by the men'oe.s "
the EXCHANGE. who asserted that w
would be continually harsssed by a."
,on,nts AZ Albany TO amend the oh"''''
OF the exchange. H.
" r-,ter,,ver admitted that II VAS TOT
IN. state legislatures TO carry out the DE-
sired reforms and that ialhhs "' ''.'''
the use Of the mails and telegram io'
Transmitting quotations OF eNchahse9
would he cut off.
Senator Nelson suggested that the OH
rerrcsented an attempt 10 coerce s'ates ~
enact LEGISLATION. Senators Bristow' lf''on.
cork and Nelsoa indicated that the allcsed
evil could be more effectively suppressed
hv direct legislation providing for the rex
,.la,iop ~ stock and bond issues by the
federal government
Could not Congress bar the mails 10
,oluntar, association as we'll as "a cor
marathon" asked Nj. Hitchcock Of MT.
I-nternoyer and the latter admitted that II
could
State Regulation Sought
Then" said Mr.. Hitchcock. there Is
no reason for Incorporation?
congress" replied Mr.. Untermyer'
should say that no stock exchange shall
send its list through the mails unless 1t IS
Urder the regulation Of the state as COL
poration chartered by the state. Ihere
should he that guarantee Of state super
vision attached to All quotations through
the mails. II is state regulation that Is
provided here
But We are supersedinS the state said
Nlr Hitchcock.
"Not al all" said Mr.. Cntermyer we
arc not saying what state shall DO We
are simply saving that the mails snail
not Ne used for quotations Of All eH-
change IN the charter Of which there are
not such and such stipulauons.'
What YOU arc irving 10 do. said Mr..
Hitchcock is 10 prevent the circulation
or fraudulent corporate securities. why
not cut this thing short? Why not say
n the corporation that quotations of Sc
curties shall not PASS through the mails
until It has filed with the Postmaster
General correct statements OF the values
behind its securities? That would leave
out all this indirect dealing with the eS-
changes and the unjust burdens imposed
upon innocent stocks listed on the ex-
change
Nj Untermyer seemed somewhat taken
ahack by this suggestion. but he did not
hesitate for All answer. He said that the
hill sought constructive legislation. that
IT sought. not TO check quotations OF
stocks. but TO require that the quotations
he true MI. Hitchcock replied that all
that could he accomplished by corpora
ton in dealing directly with the Post
master General in regard TO It's securities
Meant to Coeree States.
Senator Nelson insisted. against Mr.
Untermyers sharp protest. that the bill
really intended to coerce the states int
conforming through their legislatures
with certain requirements set up il
Washington.
TO get away from all this vagueness
said Mr.. Nelson. and 10 make II definite
suppose the New York Legislature Die
charter the New York Stock Exchange
hut did not include in the charter som.
Of the requirements Of this proposed fed
eral law. what would happen them"
Mr. Untermyer. with apparent reluc
lance. eaid that the exchanges quotations
would then he barred from the mails
Why can't We hit at the corporation,
6ireotly7" asked Senator Bristow. "why
can't we make regulations for them abou,
stock issues instead Of for the exchanges
about listing their stocks?'
But the corporations are not selling
the stock, replied Mr.. Untermyer. 1T is
very rare that a corporation sells its own
securities on the exchange. The corpora
tons market the securities before they
reach the exchange The deception
against which We are fighting in this bill
lies IN the manipulation OF the securities
on the exchange"
mver. lin the testimony Yesterday Of
Edward r. Page because he was a mem
her OF the Hughes Commission. That
commission had its hearings and made its
recommendations for legislation but
nothing was ever done until July, LOLA
and that was after the publication OF the
puio committees report. There are five
or six bills now pending on the subject.
Those bills. impotent as We consider
them. blind as We think them. were not
brought forward until the Pujo commit
tee did its work
This bfll is not Ia forbid speculation
bat 10 forbid dishonest speculation. Any
hill forbiddinG short sales would fail
But the provision Just discussed does tend
10 check short sales"
James +. Jackson. who spoke for he
Boston Chamber of Commerce, said hc
thought Congress should define what was
fraud ana keep fraudulent stock quota
lions out Of the mails. llo suggested that
the proposed interstate trade commission
might exercise supervision over the issue
of stocks. instead OF giving so much
novcr "a the Postmaster General ss pro-
posod by the bill
George \ Rich. president Of tho Boston
stock Exchange. regarded the provision
~ tic pending bin as unworkable. hut
ssid that nc could see no objection "a
some form ~ regulation or supervision