The New York herald., 1922-03-02
Banton at Albany Hearing
Says Wall Street Rule Is
Threatened.
WANTS BLUE SKY LAW
John G. Milburn Fears State
Would Put Seal on Crooked
Stocks.
Special Dispatch 10 THE NEW YORK HERALD
New York Herald Bureau.
Albany. March L.

Special Dispatch TO THE NEW YORK HERALD
New York Herald Bureau.
Albany, March I.
Wall Street and New York's stand
ing as the center of business in this
country is threatened by the ava
lanche of crooked bucketeering and
swindling stock deals exposed in the
last few weeks, said District Attorney
Joab II. Banton before the joint ju-
dietary committees OF the Legislature
ttis afternoon.
He had listened to Seymour l..
Cromwell. president Of the New York
Stock Exchange, and John G. Milnurn.
it's attorney. attack the Duggan-Betts
blue sky bill, arguing that 1t would do
more harm than good. He replied:
"The only trouble with this bill is
that 1t is not drastic enough. Last
year I would Lave opposed it as too
drastic,-but after what my office has
gone through in the last few weeks !
say It doesn't go far enough.
And want to tell these people OF
the Stock Exchange" he declared. turn
ing to Mr.. Cromwell, that IL they don't
get behind this sort of bill there will
be legislation that will wipe them out OF
existence. A few more OF the things
that have come to light in the last week
and pressure will be brought to bear on
Congress. which does not listen to Wall
Street"
"ODly One Exchange Firm"
Senator Burlingame. chairman of the
committee. asked him IL some of the
Stock Exchange firms were not mixed
up with the questionable deals that had
been exposed.
Wagner & Co. is the only one" in
terrupted Mr. Cromwell. jumping 10 his
feet. I'VE regret that that has happened
and are doing all in our power TO stop
that sort OF thing"
Mr.. Banton replied that the Stock Ex-
change and the Consolidated Exchange
had done everything in their power 10
help him In running down the swindlers,
but insisted that no honest broker need
have any fear from the Belts bill. The
bill provides for the licensing of all
brokers and dealers by the Secretary OF
State and for the filing with him OF
statements concerning the sale OF GER
tain stocks ard bonds and Of certain
promoting and uderwrlting agreements.
This bill viii stop the floating of
wildcat securities" said Mr.. Banton.
But we should 40 further We should
have legislation that viii stop bucketing
wash sales and the trading against
orders of customers. al ~ which are
violations OF the law. There are many
so-callcd reputable firms that have no
scruples about indulging IN the last
practice.
Books Cannot ~ Fssmtaed.
THE trouble we are hsying now =
that we cant examine the books ~
swindiing firms that g. Into bankruptcy
When they turn w their books they
stand on their constitutional right tha'
nothing found In them can ~ used -
prosecute them crlminnlly. Th~Y should
be forced 10 sign 4 waiver ~ thia f0n.
stltutlonal rieht"
George Hodges. rcpressntlnx ths In
vestment Bankers Association. nnid the
Belts bin was FUN ~ imperfct iious ard
asked that no action be taken peuflnK
enactment ~ Federal blue sky ihw
on which his association - working wttb
the Committee ~ Foreign snd Interstate
Commerce. ~ said ais0 that a stand
ard was being drawn 20 al States
Mr. nanton replied that - uniforr
blue sky law could apply 20 New refk
state. because no rincc else IN ths
country has such iarge exchanges ite
added
The New York stock Exchange ~
any other exchange should not ~ e.
cepted from regulation ana sursrvfslnn.
You should also supervise ~ curb fhe
aliuring circulars or Advertisements
used 20 tempt the Guliihle - buy on
mining and other stock ~ little - ~
value.
There y absolutely ~ need fOr
pancky feeling from sucb legislation
among either Investors ~ honest
brokers Tho daily martct rnrsrta nhuw
that legitimate concerns are enlovlrr IA
large and Increasing business ThF
honest man or concern courts the nshf
of inquiry. while the crook tuns Il ~
every known subierfugc
"To use Tho vernacnimr 81 Wall Street
every square broker u q boil On honesty
while the dishonest broker or hucketeer
II bear on it"
Mr.. Mllburn said the attitufe - th~
stock Exchange was 20 cooperate with
those seeking 10 stop. preveaf ~ rsm-
edy tho existing evils- Hs ssdeaf
we know that money a gotten
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