New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-01-20
Provisions. if Not Modified
Might Wipe Out Stock
Exchange Dealings.
MEMBERS SEE PUJO
REPORT AS BASIS
Penalty of Loss of the Use of
Mails Causes Special
Agitation.

Since reading the full text OF the bin in
PRODUCED by Senator owen last week call
ing FOR the regulation OF stock exchanges.
members, and particularly the board OF
governors Of the New York Stock Ex-
change have become greatly acitated over
the possibility OF the measure becoming
law. Daily conferences are being held,
and the Lawyers for the exchange are
carefully studying the measure. In order
10 obtain fuller Interpretation OF several
provisions which are not az vet clearly
understood
one governor said Yesterday the bill had
the hand OF Untermyer written all over
it, And the opinion held by virtually all
the members Of the exchange is that Sen
ator owen has based his proposed reguia-
tons on the report Of the Puio committee.
The bill presents 10 the exchange one Of
TWO alernstives-it must incorporate UNI
der the laws Of this state o. place itself
under the control OF the Postmaster Gen
eral under penalty Of losing use Of the
mails unless certain regulations are COM
piled with. The governing committee
feels that valid arguments can be pre-
serted at the hearing on the bin, which
begins in Washington on February 4.
against the incorporation feature. but al
present the members are 81 a loss 10 cope
with the second phase Of the situation.
The Hughes commission. I'm its report on
the New YORK Stock Exchange, found
that Incorporation was not necessary for
the best protection Of security holders.
The regulations i'm the owen bin with
which the exchange must comply should
1t remain an unucorporated institution
are summarized as follows:
That before the securities Of any com
pany are listed there shall Doe filed
statement. verified by the oath Of an Of
fcer Of the company that the sworn
statement must contain copy Of every
contract or agreement in writing, and
full statement and description Of the
terms Of every contract affecting the
authorization, issue sale or disposition
Of the securities admitted or sought 10
be admitted accompanied by fun dis
closure OF all commissions to bankers.
brokers. middlemen. etc. IN connection
with the disposition Of such securities and
or the net amount realized or 10 be
realized by such corporation therefor
The third requirement makes il neces-
sary for every corporation TO file annually
with the secretary of the exchange and
with the Postmaster General q particular
statement Of all agreements and transac-
tions between the corporation and any OF
its officers Or directors. or with any part
rershlp, association or corporation IN
which any such officer or director is in
terested
The fourth requirement makes II i'm
possible for the officers Of the exchange
10 strike from the list any security eX-
cept after notice to all security holders
affected and with the approval Of the At
tornev General The fifth requirement re-
1ates to manipulation in substantially the
same manner as provided by the laws or
this state. The sixth requirement forbids
any broker from hypothecating any Sc
curity belonging TO a customer for an
amount in excess OF the sum owing the
broker. or from entering into an agree
n,ert with the customer for use Of his
securities
Brokers are also forbidden 10 lend Sc
curities pledged with them. and no buying
order is TO be executed unless the Gus
toner has first deposited 20 per cent OF
the purchase price II compelled 10 COM
nj, with all these requirements officers
OF the Stock Exchange predict that no'
enough securities would remain listed to
make the existence OF this institution
necessary.