New-York tribune., 1922-12-19
s,w Exchange
Esde Told as
Firm Suspends
..meut Of Houston, ,
- & Co. Is Seen as
y - Result of the More
yastic Supervision
naIides Over 5 MilliOr
Ro.rd" Outlines Ideas
y How Brokerage Busi, /,
=. : Should Be Conducted

aN4H IAAts~
-, was made from the
s,h. stock Exchange shortly
~. Z. |" n,rEs, opened yesterday Of
~ Z. ..,on Of Houston. Fble q
. '.,P,I !, me most important brok-
r ~ ~, !, h the West, which later
~ !. -, ..,,snment to The benefit Of
-. 'r. !. rs headquarters are y, IN
. c,.y. and the partners eus w NJ NJ
"a sss,son, hOOr member '
~, n, immediate cause aus ,Sd oi
Aihousa was said 70 pe the
As ilsigIll,n,,.a, l,,,, a meet q demand rom
fFnt inAeinsy ~, ssoO000, there was
Nv As.s.,l,ion In the financial snsss,;, c'' - tbe
s.,.TSSuts the pressnI e., ,ts mem
.'s.a risid superyislsn S .rra "a eY.
pore Is, ,hs Stock Lrehango, - ~
beIs N n he Yscent questionha'io
-, - nsnbsr frnt. ..a ~. IN
sos H 90 publlc yesterday tne N IN
Ia naA'ss sassuFSht 10 this document the
fornsneo "a he Exchange also set
tatloIss., ,he hrst time IN \ formal
feTn 80 thelr Interpretation OF the
H...sy N which SOUND prokerage
.'dss,s should be conducted.
Affects Market
s,,. AZ the reaction In the stock
I.s.t vts attributed 10 selling for
syui account BY the New York
,.,.ssondsnts. This liquidation was
,.V;,st ,s N oil and copper shares, In
,.il,s Texas Company, Philips
,'..aisum. ..,Is invineible Oil, Sinclair
i.......iliSst,d, skelly Oil and Marland
~ The Arm has branch Offices In
-, okla, and Oklshama City In
.i4i,lor 70 being a member Of the New
!. q stoek Exchange, u had member
Slr On the Chicago Stock Exchange
4. Esr York Cotton Exchange and
- york Curb Market Association, the
~. suspension from the latter also
osI,ratIons Of the hrm were said
|. r,Sus City 20 exceed $4,000, 600,
.sisash Il was reported here that the
e'lgitsa might amount 10 between
3 r6oo0oo and $40 100000. Cash in the
IN a the close Of business on
,,t1,Ssv was approximately 100000
!. sistion the Arm had an unde-
.,,lr,d amount Of securities on hand,
~ Il which we're pledged for bank
,snG
!, 49, bsad oAies on receipt Of = tele-
~ from Mr.. Houston In New YORK
ssy,,tinr a voluntary liquidaton. Re
~, from Chicago stated tnat the
'rr, dealings in grain were not ex-
,,,Iv, and for that reason were not
10 be the cause OF its
TSoms z. Reynolds. q Kansas City
,,torey, 10 whom the Arm made an
,,sivrrent, sstimated assets at S5,5o0,-
eNo "a WsbilIties At s5,700,000. He
aid thst sbsus 50 per cent Of the OBJ
iIgstions nay Be paid IN fifteen days.
NJ per cent IN sixty days and per
cent ltiK
n, Issssmsnt Of the Stock Exchange.
ssllshs is conception Of the proper
conduit si brokerage business, said'
Stock Exchange Code
@Ths first requisite for the sound
NJ eosssrvstive conduct Of a hrn OF
fskers Is the possession q an amount
I sspitsl so proportioned 70 the mag,
lsuds OF its commitments that al
vbsble business losses can be met
n, A.. out NJ ia own funds with.
4 sndangerinE the funds OF its
s.sfners. Any deficiency Of capital
rtably tends 20 a situation where
! Arm Is financing weak accounts
D the funds Of its other clients.
sOf equal Importance 20 this safe
,J rs the requirement that Sc
rite. deposited in the hands OF q
oksrare firm BY SIS customers, either
margin or for safe keeping, be al
times 80 handled as to be free from
nsceSsary jeopardy; that no greater
,ount Of these securities be used for
than is warranted by
itomers' debts, and that none OF
an be usod In connection with
iv,t. specuiations Of the firm itself
SThs financial stability Of every
'ofsrzRe house conducting q margin
,slusss nsceSsitateG the strict re-
llremsnts Of ample margin in. tho
eeunss Of ell its customers without
Iaptions. Finally, no speculative
'atures should DO undertaken oy
smbers Of the firm, Jointly or In
which involve any danger
TIE safety Of customers accounts
trusted 10 their keeping.
a business conducted In conformity
IA the above requirements Will be az
'ss from the danger Of insolvency az
d possible to make II, and the ques-
saasIfe nov IN use by the New York
,sek Exchange 10 90 framed as 20 dis
las whether or not these require
,tnb are being met. BY employing
lh eusstiennairc AZ short intervals
y tTehlnge expects to be able 70
'sise. ireipient lnfrinEementS OF these
'essirsments before they have had
iln. 70 reach dangerous proportions,
~ % npidly enforce remedial meas
w With . view to forestalling fu-
", lhsolveneies."
htuded IN the information sought
= y Stock Exchange questionnaire
" VA bank balances, money bor-
~ ~ yalne of collateral, market
IVA q heVotiahla epcuritieg. Gus