Evening star., 1923-07-23
PLAN BILL TO CURB
STOCK EXCHANGES
Public Loses $500, 1000, 900
Annually in Securities,
Declares Untermyer..

plans ,f thx. PEOPLES Legislative
Service, with which Senator La FOL
Ietlc, republican, Wisconsin, Is idehti-
fled. TO cooperate with Samuel inter
,..yer. New York attorney, i'll pressing
for legislation in the next Congress
10 control stock and security exchanges
and issuance of stocks and bonds, were
disclosed here today.
basil Nj. Manly. director of the serF-
5ce, made public correspondence WIN
IIr. lTnterInyer. detailing the plah -oE
federal regulation of stock exchanges
and securities offered TO the pubic ana
ANNOUNCING the alleged "feeclng OF the
Sublic in security markets.
TIn,rart Of $500, 100000 annually
since tbe war has been lost by the puo-
- NJ. Intermyer said 1t vas esti-
liza sd through fraudulent stock pro"
mt jons. bankrupt brokerage houses
..utf "hl"keteeTS.
neas states Important.
H.. 4aued that this estimate oiu mo-
;.lciud, losses from dishonest man pt'-
,,ti,,n .f securilIes and taisc ulaIhee9
lat have been created. IN Which 80 "a
't.tlriri.G have been un'oaded on N
'...,,,,.. tirnugn the ilicgitimate f!ieth
=, a-,d machinery OF stock eACiii'r'
nh. sl4tes have proven hhPoteit'
- control the situation. Nj ,oleru-
vtJ. declared, ard the fedcFal gov
en-. n5 aid. should step N. -
N:., Manly requested. and Mf. H.
7.rn.e~ 2grec6. av""rE'hI :" ,n-
alters thaS- u Ken ATTY" h'ii ~ ,l,;,,
-.Iera,;on nf Congress I" 2ccoinpIlSn
49,. r,fornl.; desired be prepared: ".
f-nfern,yer said il should proHld" loi
= adcrai licensing OF stock and secHr-
~ exchanges, federal or STAT -
.tnsing of brokers selling securities
- ipterstatr commerce, whether by
nail. telegraph or telephone, ana ap-
NV the British system ~ punllclIE 70
security offers and tranSaclonS.
proposed federal LEGISLATION, MI.
lermyer said, should emN"oE d tnJ IL
7ures Of his bin which passed lht
.Jew York senate, last session, nut was
defeated by the lower house
Rams stock Exchange.
\ severe arraignment OF the New
YorI5 stock Exchange is contained h'
.Jr. Untermycr letter. He chareeS
hat the stock exchange an" tht ~,
,.rests represented have been oppost"
"a .y-ry- reform measure for the pro-
-sctiou of The people, including the
cleanup of the insurance business
md the federal reserve act. lie sa'a'
IN part:
.Th vast publicity bureau Of the
so cleverly manipulated that II mas
been made to appear to the pupllG
chat this exchange Cwhich Is pre-
tsnding to pluck the mote from the
oyes of the other exchanges lnsteal
If removing. the beam from us own
Lye) is engaged in a, comprehensive
system OF reform of other exchanges.
instead of which the facts are that-
"(a) A substantial part of the re-
cent fraudulent failures have been
,nsmbers of its own exchange Whom'
It has apparently not tried or not
been. able to reform.
"(b) That the curb exchange IS 2
mere creature of the stock exchange:
"(c) That the third exchange or
New York city, known as the Con-
solidated exchange, could not now
and never could have existed With
out the cooperation of the big eX-
change.
Charges DespOtic Power.
There is no power in the world
80 despotio and all-embracing as
that possessed by the New York
stock Exchange, not only over its
own members but over the entire
security business of the country. If,
for instance, It were to pass q reg
ulatien, as it has been repeatedly
asked to do, and as it should in com
mon honesty do, prohibiting It's
members from hypothecating the Sc
curitfes of their customers for more
than the amount owed by their Gus
toners on that security. the whole
sale misappropriation of customers
securities that has been characteris-
tic Of almost every stock exchange
failure would disappear.
TT is not, but it should be, just
as much crime for broker to
pledge his customers securities for
an amount greater than is owed by
the customer as it is for a president
or cashier of bank to take money
out of the till or to steal his de-
positors' funds And yet that prac-
tice is now regarded as an entirely
legitimate performance. That in
itself, apart from other practices, is
sufficient to condemn the entire pres
Ant system"