New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-12-26
Capital Issues
committee Stops
Present Activity
recommends Law to Con.
t'n"c Control of Securi-
ties and Prevent lmposi-
ito" on Investing Public
Ncw York Tribune
Washington Bureau

dsHtnQtoN hureGu
WASHINGTON, Dec. 25.-Lcgsla-
''on to prevent the sale Of worthless
and fraudulent securities is required |
Immediately to safeguard the public
against enormous losses, Charles S.
hamlin. chairman Of the Capital Issues
Committee, declared to-day in state
ment announcing that the committee,
whlch has controlled the sale of Sc !
curties during the war, Will suspend |
operation December 81
In warning the public against rock
less and fraudulent promoters Chair
man Hamitn disclosed the fact that
schools are being established in some
parts of the country to drill statesmen
in the art Of persuading investors to
subscribe to unmeritorious or worth |
less securities" He said it is the in
tentlon of the committee to recommend
TO Congress law to prevent these
abuses.
Secretary Of the Treasury Glass.
commenting on the decision of the
'aplta issues Committee to suspend
operations. also emphasized the i'm
portance of legislation to protect the
public against INSCRIPTIONS promoters.
81 intend to ask Congress immcd-
ately for legislation that will check
the traffic in worthless securitics,'
Secretary Glass said.
Charles S. Hamlin, chairman, made
this statement for the committee:
"ln view Of the rapid changes that
nave taken place since the signing of
the armlsticc, the Capital Issues Com
mlttec has voted to suspend its activi-
ties on December 81.
Won't Be Dissolved
The committee will not be dissolved.
~ ,t.,l
found that the sale of new securities
completes unduly with s. government
financing, or for other reasons it may
become desirable for the committee to
resume is work pending its dissolution
by the President or by operation of
law
Although the war emergency which
gave rise to the creation of the COM
mittee has passed, it is nevertheless
Imperative that capital should be saved
and not wasted, and the removal of the
restraining influence cXerted by the
committee during its existence should
not be construed as approval of the
financing of unnecessary public prof.
ects or private enterprises Of doubtful
merit. On the contrary, the financial
needs of the government and the large
capital requirements Of the railroads
and for the read ustment of American
industries to a peace basis compel
strict economy in the use of new cap
ital.
"While legitimate business may safe
~ be left TO work out it's own prob
lens the capital issues committee feels
that it would be unfaithful to its
sponsibilities if it failed to warn the
public respecting the enormous losses
sustained by the nation through the
sale of worthless and fraudulent Sc
curities~ In the opinion of the com
mittee, the sale of such securities
should be restrained in times of peace
as we'll as in war, and it is strongly
urged that Congress establish ade-
quate machinery to put a stop to this
traffic
"The extent of the menace, due to
The issue Of such securities, to the
holders of government bonds is re
vealed by the fact that schools are
being established in some parts Of the
country to drill statesmen in the art
of persuading investors to subscribe
for unmeritorious or worthless securi
ties This can only be prevented by
legislation vesting in some duly con-
stituted public agency full power to
restrain the offering Of fraudulent or
worthless securities.
The capital issues committee warns
the public and earnestly directs the
attention Of Congress to the problem.
1t is the intention of the committee to
make 81 supplementary report to Con-
gress recommending law to prevent
these existing abuses and such impo
sitions upon the investing public.
"The committee will maintain its
offices in Washington until further
notice."
The statement of Secretary Glass
follows:
"The decision of the Capital Issues
Committee to suspend its activities on
December 81, should not be interpreted
by the business public as warrant
for any expenditure of capital for need
less or unwise purposes, whether pub
lie or private in their nature. Should
it become apparent that voluntary re-
straints are not being exercised so
as to prevent the misuse Of capital, I
shall request the committee to resume
its control.
Need for Legislation
"My chief misgiving in accepting the
action Of the committee arises out of
the need the committee has frequently
expressed, and the Importance of which
has become increasingly obvious, of
protecting the public investor against
the flood of worthless or doubtful Sc
curities which threaten the market
when the restrictions are removed, and
present conditions emphasize the i'm
portancc OF obtaining emergency legls-
lation as speedily as possible, SO as to
be able to cope effectively with this
evil. The government not only should
protect itself as to future bond issues,
but as we'll owes q duty to the millions
of Liberty bond buyers. to restrain
reckless fraudulent prom oters, particu-
larly at this time.
,, 81 intend to ask Congress Immediate
ly for Legislation that will check the
traffic in worthless securities, while
imposing no undue restrictions upon
the financing of legitimate business,
and shall urge that it be made effect
i've before the close of the present
session. Meantime, it may become nee
essary, before such legislation is
passed, to reassemble the commtte g
for the purpose Of resuming its func-
tons"