The evening world., 1922-05-12
CROMWELL SEES
PERIL IN LICENSES
FOR n. Y. BROKERS
Exchange President Tells
Philadelphia of Precautions
in Stock Market.

PHILADELPHIA, May 12.-''One
thing I would like to make very clear
to your minds is what our So called
opposition to Blue Sky Laws really
means" said Seymour L. Cromwell.
President of the New York Stock Ex-
change, in an address at a dinner OF
the Philadelphia Stock Exchange last
evening.
"The bills against the passage OF
which we have protested" he con-
tinued, would have thrown open the
dealing In securities practically un-
molested to those very people whom
we feel should be ruthlessly driven
out of the business. The very poll
ticians who claim to have the same
object in view would be granting per-
sonal licenses to brokers at a nominal
cost, practically giving them a badge
which would carry with 1t in the
minds of the people a guarantee of
honesty from the State. We know
how easy 1t is for a dishonest man
to get a letter of recommendation
from a reputable person. The very
embarrassment of refusal seems often
to inhibit a man who otherwise might
refuse.
The now notorious case Of Hughes
d der is worth citing. After the
New York Stock Exchange had re-
moved their wires about a year ago
pressure began to be exerted on the
authorities Of the exchange from
many high quarters. Politicians OF
all ranks and of various parties
seemed suddenly to rally to the de-
fense of these men. Is this not evil
dence that these very people against
whom the law would have been aimed
could easily have obtained a license?
Furthermore, we can see nothing
, but danger in a law which provides
that a Secretary of State or some
other official should practically guar
antee the issues of stocks and bonds
which have been presented to him and
meet with his approval. This would
not stop the bad things. and would
be really an interference with legiti-
mate business.
1.-THE New York Stock Exchange
has always been far in advance Of
The law in It's Lifting requirements.
and yet 1t would be the last to feel II
advisable to put such a stamp of ap-
proval on an issue of stocks and
bonds; and thus that particular
stamp would be their guarantee
rather than their own value.
''If there is one suggestion moro
than another that I would like to
leave with you II iB the necessity of
educating the public concerning the
functions of the Stock Exchange, the
service it renders. the availability Of
that service to small investors and
the safety that surrounds transac-
tlons between the public and men,
ber firms of the Exchange.
"If the public could picture all OF
\ the distribution of manufacturers
flowing through one outlet-a super
wholesale house-to the retailers and
to the individual buyers, 1t would
nave Dettet realization ol tno btdtuS
Of the Stock Exchange.
"There is a crying need for the
Interpretation of the Stock Exchange
TO tho public. Mystery begets sus-
picion and distrust, and until we find
a way to give the public proper un-
derstanding of our institution so long
will we encounter hostility born OF
Ignorance.
1--WE of the New York Stock EIx-
change are frankly appealing for the
support and confidence Of the pub
lis." concluded Mr.. Cromwell. "That
we may deserve It. through the con-
tinued maintenance Of high stand
ard OF business conduct Is the ambi-
tion and the expectation Of every true
friend OF the institution"