Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-02-11
NOW MY IDEA is THIS!
Daily Talks With Thinking Phiadephiams Subjects They
KnO,v Best

within the law, it makes 1t hard to invoke
legal action.
SIN this connection I cannot do better
than to quote the words Of Seymour CrOm.
well. president of the New York Stock Ex-
change. in recent address when he said:
Against this new peril the stock exchange
has set its face. The stocks of clients,
bought for clients, must be carried for cli-
onts. not only by members OF the stock ex-
change. but by all brokers who have the
slightest connection with the exchange. No
stock exchange firm can evade responsibility
Tor the names which it places on its books.
How can the exchange successfully repudi-
ate the bucket. shop on the outside when
some stock exchange firms accept the ac-
counts of houses doing this dishonest busi-
ness! The excuse that they do not know
WI not hold. They should know. and l be-
heve that any house taking such accounts
with proper diligence would know
Protecting the Investor
''Alr. Cromwell has the right idea, and
nope the time Will come when Il practical
working out of this thought will be in force
all over the country. 1t will mean saving
OF millions of dollars year for the public.
At the same time the public at large
has little idea OF the measures for Its pro.
lection which are in force in the stock ex-
changes. Every reputable house has its
books audited regularly. not only as a pro-
lection to it's clients. but to safeguard It.
self as well. The Board of Governors can
call for an audit of the books of any Of its
members at any time, and this is done frc-
q1cntly. Of course. in the cases Of houses
which are not members of the stock ex.
change they have no authority. As a result
the violations of the very strict exchange
laws by members Of the exchange are infre-
Gucnt and they are invariably followed by
the severest punishment.
"The penalties inflicted by the stock OK.
change itself on those of its members who
violate It's laws are such as to deter any
but the most foolhardy or reckless from
even contemplating such action. Not only
are the offenders expelled from the ex-
utterly and irrevocably ruined
Advantage Over the Law
by administering its own punishments
the stock exchange has certain advantage
over the law, especially in the matter Of
lnyed sometimes indefinitely by skiliful law.
yers, but the penalties of the exchange are
not only severe. but are also immediate.
There are also other protective meas.
ures, such as the fund which must be main
tanned with the stock exchange clearing
house, and In every way possible the ex.
change endeavors to protect both itself and
those who do business through its membcrs
by severely furnishing those of its members
VINO nre guilty OF practices not in accord
with the rules of the exchange.
The stock exchange has great and i'm.
portant work to do in the distribution of the
securities Of the great corporations of the
country Considering the Immense amount
OF business done annually, there are verv
rev who fail to measure up to the standards
of the institution. AS a class the stocI
exchange people try to render honorable"
etticient and Intelligent service to the neo.
pie and try. to fill adequately the Important
place which, it occupies in the financial
community ""e'"'