Evening star., 1926-10-26
MEN AND MONEY
By NJ. S. Rukeyser
Copyright. 1926.l

The States rights issue is coming
to the fore again in the realm Of
finance.
The new movement is not against
the concentration of political power in
washington. but against the central
ization Of financial influence in New
York
IN the last decade. New York has
become the leading speculative center
of the world. and. besides adding a
huge array Of foreign securities to it's
trading list, the New York Stock Ex-
change has taken over many domestic
companies whose securities were
nursed into maturity in the out-of-
town stock exchanges. The exchanges
IN other cities have not grown in the
last decade cOmmenSurately with the
New York bourSe, and some of their
sponsors are afraid of ultimate eXtinc-
tion if present tendencies are not
resisted.
Ralph w. Simonds. youthful invest
ment banker of Detroit and president
of the Detroit Stock Exchange, is the
prime mover behind the new ASSo-
Grated Stock Exchanges, of which he
has been named first president Mr..
Simonds has called a meeting Of Off
Gals of all out-of- town exchanges for
49, ~AiA'Vi o tlIitl y DIT 81. 1Lou1S All
the out-of-town exchanges except
Chicago have joined the movement,
and even the New York Stock Ex-
change, which is reported to be
friendly, will be represented by an
unofficial observer.
Main Objectives of Move.
I asked Mr.. Simonds the main OBJ
Jectives Of the new movement to
heighten the prestige of out-of-town
stock exchanges.
In the last 10 years." he replied,
"out-of-toWn exchanges have been los
ing out, as New York forges further
into leadership. Unless out-of town
exchanges strengthen themselves,
some of them may soon disappear
And yet they serve a distinct eco
nomic need in helping sound local
companies to finance their expansion
and growth until such time as they
are large enough to seek a national
market for their securities.
The New York market has become
so big that it will, in my opinion, be-
come unwieldy unless it encourages
the development OF strong supple
mentary markets.
The purpose of the new organiZa-
ton Is to help the out t-of-t town ex-
changes to strengthen themselves
through the interchange of informa-
ton and the swapping of ideas. We
wish to find out the best practices
of each, and make their adoption
general. We know that investors
discriminate against securities listed
on out Of town exchanges, because
the market in them is slower than
in New York. We shall attempt to
improve this situation by listing some
securities in more than one out-of
town market, encouraging arbitrage
operations. For example, Hartford
brokers can interest Detroit brokers
in insurance stocks in which they
specialize, and Detroit brokers in turn
can interest Hartford brokers and
through them Connecticut investors
in shares of automotive companies.
Information Hard to Get.
AT present, it is difficult to get
information in standardized form
about the earnings, and capitaliZa-
ton OF companies listed in out-Of-
town markets. We wish to encourage
the creation of adequate business
statistics in this field.
Through our new organization, we
also hope that out-of-town exchanges
will be able to cooperate more effec-
lively with Government officials and
other agencies in protecting investors
from fraudulent practices"
Mr. SimondS is one of the principal
partners of an investment banking
firm in which none of the members
Of the firm is older than So. During
the last two years he has injected
new and progressive ideas into the
of the Detroit Stock Tx
change, and is now in position to
carry out his work on national
scale. When Mir. Simonds became
president of the District Exchange
seats were offered at 500 and there
were no buyers. Recently the bid
for a seat was 5000 and none offered.
Among the reforms introduced was
the adoption of the monthly question
naire bv which the exchange keeps
in touch with the financial strength
of member firms.
New York. of course, is more than
a municipality. 1t is national and
an international market, and should
be Judged as such. Artificial efforts
TO check New York's growth have
nroyed of no avail. When the Fed
eral Reserve Act was passed III 1913,
Congress attempted to deceptrallze
the banking system of the country
hv organizing reserve banks in l.
cities. thus ending forever the doml-
nation of the country's credit by New
York. This new system helps 10
allocate credit, but it has not thWarted
the growth of New York, which has
leaped further into financial leader
ship.