The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-25
EXCHANGE SEES HATE
In UNTERMYER FIGHT
DenOunces Lawyer in Briefs OPP
posing Owen Bill for
Incorporation.
CALLS ATTACKS INSINCERE
Holds That Provisions Of Pro-
posed Measure Are In
constitutional.

The Stock Exchange distributed yester-
DAY among its members the brief and
reply brief prepared by its attorneys for
submission to the Senate Committee on
Banking and Currency. arguing against
tho Incorporation of stock exchanges.
and the closing of the mails and the
telephone and telegraph wires to the
carrying of quotations of exchanges not
incorporated
The bill providing for the incorporation
of exchanges. as drafted by Senator
Owen, followed closely the lines recon-
mended by the report of the PuJo COM
nittee which Is generally thought to be
the work of Samuel untermyer. In the
brief and reply brief. both of which were
drawn by John G. Milburn and Walter +.
Taylor, counsel for the stock Exchange
the constitut.onalty OF the bill IL at
tackled. The briefs deny all charges OF
manipulation and alleged diversion Of
bank funds from productive industry TO
loans In aid of speculation. They say that
10 Justify such n bill It should appear
that there was n definite evil to cure and
that the bill AS drawn would be
a remedy II is pointed out that any In
diyldual or group of individuals has the
right to buy or sell securities as well
as any other commodity. and that specu-
lation Ia necessary. useful and legitimate.
II In also shown that none IL the IN
atances designated by the Pujo commit
tee or by Mr.. Untermyer In his brief show
such widespread manipulation as to re-
auire radical legislation. such as denying
the exchanges quotations the use OF the
mails.
As to the alleged diversion OF bank
funds and capital from productive Indus
try to loans to aid speculation on the
Stock Exchange, the briefs state that In
1911. more than 81 200. 000. 900 was loaned
70 supply the needs OF the country at
large. as against s2so.0oo.ooo loaned to
stock brokers. The assertion that the
loans made by New York banks and trust
companies divert funds from crop moving
and other legitimate purposes Is refuted
by pointing to the situation during the
panic year OF 1907. when money rates
were al their highest. Former Secretary
~ the Treasury Cortelyou's annual report
IL quoted as evidence to prove that in
y,er,ods OF unusual demand for money for
crop moving. &c. funds cannot be kept In
New York when needed In other parts OF
the country and that In such periods the
outflow from New York exceeds the IN.
flow.
The reply brief protests against the
attack upon the exchange and its members
IN Mr. Untermyers brief on the grounds
that Il is not the "phraseology Of sincerity
nor of dispassionate analysis or criticism.
The brief charges that Mr.. Untermyer
reveals n passionate, vindctive and per-
sonal antagonism." and adds that the ex-
change has always been IN favor Of any
LEGISLATION. national or State, regulating
the Issuing of securities by corporations
and requiring publicity as to promotion
profits and other corporate transactions
which affect public interests. The examl-
nation Of the books OF the members OF
the exchange by the Postmaster-General
is denounced as unconstitutional.