The Washington herald., 1918-11-05
ADDED MARGIN
is DEPLORED
Former Broker Points Out
Disadvantages, Hol-.
land Tells. =.

A man who has had successful es-
perience in the general commission
stock business as that WAS carried on
from 1850 until he retired in Ise sod
this morning that his experiencs OF
thirty-hve years in that business had
demonstrated that out Of 500 aeeounts.
using that figure as an average. from
75 per cent to 50 per cent Of them
rarely had over 10 per cent margin
kept good or course these accounts
required constant watching in order
TO make them good How can Il be
possible, then. ION the drop Of the
hat" TO use this mans words 40
expect that those who are now sc-
customed to keep about 70 per cent
margin, or a little more. maybe. Win
be able to respond to a call for -
per cent margin?
This retired broker who in his dsy
stood with the most honorable and
conscientious Of all OF those who were
engaged in this vocation and who
I transacted much business for some Of
those who dealt heavily in securities.
confesses that he Is concerned over
the action OF the so-called Bankers
Money Committee IN insisting that
hereafter the banks require margins
Va ~ ANAEA ~ INl NtlAI Alt ~ NIuA
alone in the apprehension that tbs,
ultimate results may be not salts
factory. Prom many part OF the
country come reports that indicate
that a feeling does prevail that this
action OF the sO-called Bankers
Money Committee is a revelation OF
tremendous power. suddenly assumed.
with almost unlimited authority 70
control the natural ebb and fiow Of
business. There also is, II not sus-
picion, at least a suggestion or
thought, in other parts OF tho co1n-
try that the action OF the Bankers'
Committee may lead 10 the charge
that the committee was interested
with capitalists in securing all the
cheap securities during the present
temporary stringency OF the money
market
Nevertheless. st is worth while for
those who have entertained this
thought to understand that the Bank
ers' Committee. as well as many OF
the other war committees, is equipped
with personnel which is beyond re-
proach. The members are patriotic.
loyal and jealous in thought and &C
ton. Yet this committee has sssunn-
ed power which in former days, not
50 long ago. might have JUSTIFIED the
country in asserting that the wall
street money power IS something
to be reckS= led with.
The Former Money Power.
At the time when the country
was vigorously opposing centrsli-
zation Of power. symboliLing it by
the word trusts. perhaps the most
vigorous OF the attacks upon this
power was against the so-called
Wall street money trust When the
Federal Reserve Banking system
was adopted IL was commonly uu -
derstood that it would serve TO de-
centralize money power and 10 eK-
tend over the whole country credit
. resources which were formerly pre-
sumed to be concentrated in or near
Wall street
Now however. OF sudden.
: through the cooperation OF fifty or
sixty banks Of New York there is
/. an exercise OF money power which
il must be confessed is seriously
concerning thinking men. No one
doubts the sincerity OF the motives
OF those who have put these re-
! strictiOns upon the course OF the
upon the belief that the necessities
OF the government compel the con-
o. servation OF credit and require the
suppression OF a tendency TO deal
I heavily and in a speculative man.
ner in securities.
But while the motive is approved.
nevertheless there clearly stands out
the fact that a group Of bankers,
who as q whole represent the bank
ing life OF New York City. is sbie
so to concentrate power as TO place
severe restrictions upon what the
! veteran operator calls the natural
, l ebb and flow Of business"
The government through its rep
resentative. Fred !. Kent who =
rclothed with authority. is able 20
restrict the sending of American
! money abroad with intent to in
vest il in securities. But that IS
done as governmental function.
The restriction does not stand In
the wav OF the purchase in the
United states Of securities issued
bv foreign governments and mar
keted here.
Power and Responsibility.
The Bankers Money Committee.
which has concentrated power into
its hands. is without any responsl-
i lbiIity excepting that OF moral
kind. The control of money by an
organized committee having very
great -uwer over the buying and
? selling Of stocks and bonds may be
(. carried so far as TO cause great
injustice to persons OF limited
means and influence. For by a con-
tinued pressure on the market thus
exerted large portion OF the stocks
and bonds known as investment SC
curities will naturally drop into the
:. open basket OF the capitalists ana
others who have the money 10. uti-
ltzc in transactions OF this Kino.
}, while the man OF moderate means.
who Is part Of the great majority.
Z will have had no chance In this
hour Of initiation.
That Is another point brought UP
by some Of those who are wo nder-
ing whether the keeping down OF
the secuI :ties artificially in the face
Of prospects that would otherwise
send them aP may not involve dan
gcrOus and embarrassing procee0-
ings. 4, IIsy serve for a time 70
dam up a very strong force, but
that force will inevitably soons- or
later make itself felt There Is one
poi-t which is spoken OF with ror-
hccnce 10y those who are xtudv9pr
this sudden and unusual situarfsn
: and that is that government bSEas
Will be subscribed for by an pstri-