The New York herald., 1922-03-17
BUCKET SHOP LAW
DOOMED AT ALBANY
y. Y. Stock Exchange Pro-
test Brings Promise OF
RecOmmittal.
ATTACKS AMENDMENTS
Cromwell Says They Rob
Body of Power to End
Dishonest Dealing.
PROTEST. by UNTERMYER
He and Banton Insist State
Must Have Supervisory
Rights.
PROTEST. by UNTERMYER

Special Dispatch to THE New YoRK HERALD.
New York Herald Bureau,
Albany, March 16.
'file New York Stock Exchanges ap-
peal for the defeat of Senator Katlin's
"h'ne sky" law bill was followed to-
dar by the announcement of Senator
Ffrd B. Pitcher, chairman of the Sem
81 Banks Committee. which reported
the bill. that he would move to recon-
~ 1t TO his committee as soon as 1t
VS. reached on the calendar
Seymour l.. Cromwell, president of
~" exchange, sent kilograms crticiz-
in- the measure to many of the leg
- tive leaders, and in answer to these
S5.nuel Untermyer gave out a state
meilt denouncng the Stock Exchange
and criticizins Mr. Cromwell.
Senator Pitcher declared the bill had
hcan so radically amended it was
really a different bill from the one his
committee had voted to report. and
that on this ground he would move to
believed the bill has little chance of
pa sage.
The measure originally provided only
for he licensing Of brokers and for the
flia. OF certain information regarding
the liability of stocks dealt in. After it
viii Katln. and together they put in a
eeries of amendments
Mr. Cromwells telegram asking that
the bill be killed was answered also by
District Attorney Joab H. Banton sup
porting the bill who said that it offered
means whereby prosecutors could stop
bucketing.
Telegram From Cromwell.
Mr.. Cromwell's telegram follows
In the matter of the katlin bill. now
on third reading in the Senate This bill
was amended in vital particulars on
March 13 and passed to third reading
yesterday apparently without considera-
tion. There has been no hearing on the
bill or on the amendments. The amend
rlcnts are aimed at the New York Stock
Exchange. and would give every member
who is subject to discipline and every
outside broker whose ticker service Is
cut out because of improper dealings the
right TO enjoin the exchange from enforc-
ing discipline or cutting off quotations
until the matter Is fought out through
the courts. which may take several years
The amendments to the bill effectually
deprive the exchange of the power to
exercise discipline over its members, or
10 prevent the improper use OF it's quo
tations, and are directly in the interests
OF the dishonest trader and the bucket
chop.
s.Yf~x..
members and over its quotations Is the
strongest factor In preventing dishonest
dealings. The Legislature should do
nothing to affect this power. The
amendments would take away from the
exchange the power of determining
whether or not stocks are proper sub
Jects for listing on the exchange.
They would prevent the exchange
from s,spending trading in securities
when such trading was manifestly
dangerous to the public. They forbid
the Legislature to amend it's constitu-
tion. bylaws. or regulations without the
consent of the Superintendent of Banks.
The delay necessary to obtain such con-
sant would many times in the past have
resulted in disastrous panics. Note par
ticularly the suspension OF trading on
the exchange at the outbreak OF the
war. These and many other equally
serious objections can be adequately set
out only at a full hearing. On penalf
OF the New York Stock Exchange I pro-
test against the bill itself and against
its passage without proper publicity or
the opportunity on the part OF the men,
bers OF the exchange to be heard"
Says Cromwell DriveIs.
Mr.. Untermyer's statement said
THE attitude OF Mr.. Cromwell Is
based on the theory that the autocratic
and unreviewabie fats and decisions Of
the Stock Exchange are infallble and
should take the place Of our courts OF
Justice. None Of its acts vitality af-
fectsng the public welfare throughout
the land are renewable under the law
as IL stands. This bill seeks TO bring
such acts under the review of the courts.
To that the Stock Exchange objects aid
n must be admitted that the supine in
difference of the public to the control
OF this irresponsible super r-government
all these years and It's inability TO bring
the exchange within the law Justify the
continuance of this arrogant, indefen-
sIble attitude But there are signs that
the rein of despotism will soon be over.
Up to this time they have been In
class and lived In an atmosphere that
were all their own.
was there ever such drivel and i'm
pudence az this message of Mr.. Crom-
wells about IL being necessary for the
exchange to have autocratic power over
the ticker service and the use OF the
telegraph and telephone In interstate
commerce, in order to protect the people
OF the United States against bucketing?
Let there be no misunderstanding on
this point. All the quotations of secur-
ties dealt in on the New York Stock Ex-
change are distributed throughout the
country over the ticker service con-
trolied by IL and under its contract with
the Western Union Telegraph Company.
That company under Its contract can
furnish the service only TO the stock
houses over the country that are per-
mitted by the exchange to have this
service. without II they can not do
business. Any broker house can thus
he put out Of business by the ipsi dixit
Of the governors of the exchange with
out warning or reason or the right to
appeal to the courts.
"If our laws are incapable OF reach
ing bucketing and we must pay such
- Ice for turning over that Govern
mental function to the Stock Exchange
We hed better turn our attention to the
stock Exchange itself where there is
plenty OF reformatory work to be done.
Let II first pluck out the many beams of
its own eye that II may see clearly to
cnst the mote out OF the eve Of the
'bucketeers.'