Evening star., 1921-04-10
ny L. A. FLEMING.


Stock exchanges have almost as
much of a moral obligation in the
matter of exercising care in the list
. ing of corporate securities as the
} corporation director has in the man.
agement of the affairs entrusted to
himself and his associates.
- There are thousands-yes. millions
of people who will not put their
money in a security that is not listed
ON a reputable stock exchange. this
fact alone carrying. considerable as
surance and promising market at
a price any time within business
: hours.
Members of the governing COM
: mittee of a stock exchange should
feel that they are in measure
responsible for the character of the
securities thar are listed on their
trading list. 1t is not enough to turn
the matter over to listing commit
tee and quietly, without further in
Vestigation, accept the report of that
committee and with it the listing fee.
Investigating officials should give
the full board of governors the ben
eft of their knowledge. the personnel
of the board of directors of the ap-
plicant corporation, the actual amount
of paid-in capital, something of the
plants to be operated and facts that
would indicate whether the business
is likely to be founded on a perman-
ent basis.
Perhaps this is too much to expect
OF any listing committee or OF any
board of governors, but If il were car
ried out as suggested, coupled with
q requirement for monthly report
Of earnings and capitalization. IN
cluding bank loans and funded debt.
the dangers that surround investment
in securities would be greatly re-
duced.
The stock exchange that first puts
these regulations into effect will
make an enviable reputation for it
self.
1t is the unexpected that happens;
the expected causes no surprise with
its development
The expecting is generally dis
counted in the stock market.
The unexpected happenings are gen
orally unfavorable in their influence
and cause serious declines in prices.
Thus the declaration of war in 1914
knocked stocks of by points and tens
Of points.
The fake prosperity attendant on
the war, when our own millions
yes, billions-were expended for the
product of our factories and sent
abroad 10 the great expansion of our
foreign trade, at our own expense,
perity. of certain kind.
When the granting of credits stop
ped trade fell off, and from doing a
business of millions annually the
buying power weakened with very
many corporations to little better
than nothing.
The -siIent" strike of the public.
when it refused to spend it's money
save for the barest necessities. clip
ped the wings of prosperity at a
time when there was no good reason
for any show of prosperity.
The retailers first sensed this great
"silent' strike. then it reached the
manufacturers in repeated cancella-
finally the public, originators of the
movement, discovered'4t through the
effect it was exerting on their in
vestments, too late to sell out with
ont severe loss
The printing presses have been run
ming overtime turning out bonds and
stocks for years. and every large in
vestor is probably the possessor of
certificates that are beautifully en-
graved which mean nothing.
1t is not the average investor so
much that needs the protection of
directors and exchanges. 1t is the
once n-a-while investor. the woman
investor and those who. having just
sold something of real value. are
searching for place for their money
with yield as suggested by high-grade
and even less worthy advertising.
But all investors need and should
rectors in honest corporations. and
of reputable stock exchanges
1t is the easiest thing for stock
exchange to adopt a rule making it
obligatory on all corporations whose
securities are listed in it's trading
list to make at least periodical re-
ports to the exchange anent the VOL
ume OF business, any increase in Sc
curities. etc.
Stockholders should also exercise
n IL oil l1
requests of their directors Fre-
quently the board represents the ma
5ority of the stockholders. in which
event they will do just about as
they please.
stockholders should not vote great
issues of stock on the theory that
we are not going to put it out. but
II the emergency arises we want the
authorization
An authorization is a great temp
tation to directors to issuance. and
yUu Will not be informed of the fact
Tyr the better cart OF a year. AS a
stockholder you have positive rights
Sales Tax in Demand.
- Il was clearly shown by the survey
recently conducted by the Fidelity
that the educational campaign con-
Quoted in favor of sales tax has
converted practically every section
of the country to this as substitute
for the admittedly banefui excess
prohts tax. Fully SIS per cent
OF the answers were favorable to the
proposed remedy. while a larger per-
centage favored abolition of the ex-
cess profits tax.
Some opposition was found, but
generally in sections where the old
theory of soaking the corporations
is still prevalent.
1t will be interesting and no doubt
Instructive to hear Secretary MELONS
plan for doing away with the tax on
excess profits Intensely practical
: thoroughly familiar with business and
financial matters. he may be counted
on to be practical in anything that
carries his recommendation.
Has n Better Aspect.
Business looks a little better. No
one person is good judge. But the
consensus of opinion at this time
seems to indicate some Improvement
These reports come from so many
different sources that one must give
credence in modest degree at least.
1t is a far cry in many instances
70 pre-war levels and the hardest
proposition in the world is TO bring
. wages anywhere near the scale pre-
/valling before the war-a midway
would be pladly acceptable to en-
ployers and especially to the rail-
road interests.
Near the End.
The National City Bank in its April
circular. quotes a British expert in
r the cotton trade as expressing the
belief that the bottom of the world
trade depression has been seen. He
thirks recovery is near This will
CON- about through providing of
cree .ts. better productive effort. and