The New York herald., 1922-10-13
CROMWELL PROPOSES
NEW STOCK PUBLICITY
Exchange Head Says Issu-
ing Companies Status
Should Be Public.
OPPOSES MANY LAWS
Declares It Better to En-
force These Against
Fraud That Exist.
FAVORS STATE ACTION
FAvORs STATE ACTION
Official Suggests Cooperation
Among Organizations to
Eliminate Bucketing.

Special Dispatch to THE New York HERALp
ROCHESTER, N. Y Oct. 12.-Seymour
l.. Cromwell, president of the New
York Stock Exchange. declared to-day
that enforcement Of the Martin law
and the passage of new act requir-
ing full publicity in connection with
the issuance Of securities and the
status of issuing companies were the
remedies for bucket shops and fraudu-
lent stock promotions.
Mr.. Cromwell addressed the Roch-
ester Ad Club and urged Statewide CO.
operation among the New York Stock
Exchange, chambers Of commerce. ad-
vertising clubs and farmers associa-
tions for the greater protection of In
vestors and the elimination Of swim
dlers and political opportunists.
He explained that the New York
Stock Exchange was opposed last
winter to the passage by the Legislature
Of:
The Buggan-Betts bill because It
would not have interfered In the
slightest with the Issue Of fraudulent
securities, but practically would have
prevented the issue of legitimate se-
curities and would have been serious
menace to the financial market"
The Katlin bill because 1t would
have destroyed the disciplinary power
Of the New York Stock Exchange and
the passage of the bill would have
been welcomed by every bucket shop
in the country"
The bill to license brokers. as pro-
posed by Joab II. Banton. District
Attorney of New York county. be
cause mere licensing will not prevent
the preparation of fraud. but might
easily be a means Of aiding the SWIM
dler."
Blue sky laws because. while "they
accomplish a certain amount OF good.
they create endless red tape. are
easily evaded and the inquisitorial
powers impose very heavy burden
on the legitimate dealer"
Must strike Mt Root.
Mr.. Cromwell said the New York
Stock Exchange was instrumental In
having the Martin law passed. but that
the measure never had been enforced.
He added that II public officials were
sincere in their declared purpose OF
cleaning UP the bucket shops and frau
dulent stock situation they would CO.
operate In making the Martin law cf-
fective this winter
Tho Martin law gives the Attorney
General power to investigate any stock
broker upon the mere suspicion that he
is dishonest. Confirmation OF such sus-
p!cion upon investigation may be fol-
lowed either by prosecution by the
Attorney General. or. upon his sugges-
ton. by the District Attorney.
THE real interest of the New York
Stock Exchange does not lie as has
been wrongly represented. in blocking
all legislation OF regulatory charac-
ter" said Mr.. Cromwell. Its sense of
responsibility to the investing public
and to the financial world in general
inpels the~exchange merely to insist
that when legislative corrections are
sought they should not be destructive
in character. Nor should they be mere
palliatives. They must strike at the
root Of the trouble.
THE chief problems with which such
legislation has TO deal arc Q) the bucket
shop and It's swindling opera tions and
() the issue and sale of fraudulent Sc
curities. 1t may appear quite simple to
devise legal measures for the elmina-
tion OF these abuses. but IL Is only the
man who knows nothing about the In
tricacie5 of the problem who ventures
to say offhand what the sure cure is
or may be.