New-York tribune., 1922-07-30

&
careless brokers fail in Wholesale lots
81 security prices rise. The next
vhgse, Of the cycle is wrath against
.As financial machinery of the country,
IN indiscriminate anger. At present.
in some quarters of the press, the
oueston is being asked why the Con-
solidated Exchange should longer exist.
By its critics the Consolidated has
been charged with being a clearing
house for bucketeers; being a mere
refsction Of the big board, living, like
fungus growth, on the larger institu-
,oa; with deliberate attempts to make
sgrarians and others who live outside
Of the city limits confuse It's identity
with that of the larger board, and all
the varieties OF deception and fraud.
The Tribune thus recites the charges
which have been made, not to assert
their truth, but for the purpose Of
stating the issues Joined between the
critics and defenders of the Consoli-
dated There is singular need to estab-
lish the facts concerning the Consoli-
dated. Few outsiders discuss the ex-
change in the full light of publicity.
They prefer a whispering campaign of
SANDER in corridors Of brokerage Of
fees and in other safe places. Despite its
length of service the Consolidated has
been remarkably little studied. In the
4 nc
/ prisingly meager are the surveys Of
I the fundamentals Of the exchange. A
/ gsaune opportunity for scholarly re-
| search exists A study ought to be
| made of such pertinent facts as the
| simultaneity of identical quotations
from the two exchanges, and Of the
relative experiences of customer deal
| ing in Consolidated and Stock Ex-
| change houses.
This article makes no pretense of be-
sg more than piece Of newspaper
enterprise, a preliminary approach to
fundamental study.
This discussion is based primarily
upon an interplay between the finan-
cial editor of The Tribune and tho
president of the New York Consoli-
aated Exchange.
In Quest OF Data
". S. Silkworth, the president, was
seated in his Office on the second floor
Of the Consolidated Exchange Building,
an mposing $2,o00,oo0 structure on the
SO Itheast corner OF Broad and Beaver
streets, when we approached him a
seek ago Tuesday with a set Of ques-
tiors which are quoted in the sub
Joined paragraphs. We told Mr.. Silk
worth that we were in quest of data as
to the raison d'etre of the Consoli-
dated. Having gone through the most
stormy period of his executive career,
with twenty-six failures among Con-
solidated houses (many Of them Of a
highIy unpleasant character). and hav-
ing been subjected to an increasing
amount Of criticism in the press, Mr..
'sffkworth was not unnaturally hesi-
tant He wondered whether the off,
cisls of any other exchange had par
ticipated in the formulation Of the
auestionnaire. He was assured that
L the questions were the writer's prod
uct.f AS to whether q drive against
the Consolidated was planned, Mr..
Silk'vorth was informed that no special
| campaign was in contemplation, but
| that The Tribune declined to tie its
hants or in any way to check it's free
| dom to criticize the exchange in what
ever terms Of harshness 1t might see
IT. Because of the press of other
work Mr.. Silkworth asked for weeks
time to reply to the questionnaire, and
the answers may therefore be regard
ed a's the official attitude Of the ex-
change, based OH careful thought, rep
resehting the best pleading possible
under the circumstances.
| Biased estimates Of the Consolidated
are Of limited worth and studies by
independent public bodies are rare in
deed The report Of the Hughes Com
mission of 1909, which studied condi-
aons prevailing after the panic Of 1907,
Slriod in some ways similar to the
\ o' e1eil arket of 1920 and 1921, is one Of
me few official sources of information.
| The Consolidated Exchange" &C.
corting to the commission, whose
airrnan was Horace White and whose
arpose was to study the various finan-
2'al markets in New York, twas or
eanized as a mining stock exchange in
'"S, altering it's name and business
l'h 1856 Although of far less impor-
'ahce than the Stock Exchange, it is
i'eVertheless secondary market Of no
mean proportions. BY far the greater
part of the trading is in securities
lRsted on the main exchange, and the
prices are based on quotations made
.aere The sales average about 45,000,-
E0So shares per annum. The fact thai
members make a speciality of
Broken lots,' i. e., transactions in
mares less thar the hundred unit, is
Iased as ground for the claim that il
II serviceable institution for in
es'ors Of relatively small means. But
IS obvious that it's utility as q pro-
iuer Of capital for enterprises Is ex~
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