Evening star., 1926-12-01
MEN AND MONEY
BY NJ. S. Rukeyser.
Copyright. 1929
copyright. 1929

The New York Stock Exchange
stands set against the use or the
modern technique of advertising o.!
members because it does not wish 10
lure the unfit into the speculative
whirlpool, according to F.. II. II. Sim
mons, president Of the bourse.
The stock exchange is frequently
criticized for its policy in respect 10
advertising by member firms, each or
which must submit copy about which
there is any question in advance 1or
approval by the business conduct COM
mittee. In the widespread criticism
by advertising men, it Is pointed out
that the exchange is so strict in
passing on paid advertising by men,
bers that it turns it into dull, tomb
stone COPY, and at the same time Is
lax in respect to information sent
out by brokers in market letters ana
flashes over direct wires.
THE admitted practice of the eX-
change in extending closer super
vision to advertising by its members
than to their market letters and di-
rect wire communications" Mr.. Sim
mons told me, "is based on the neces-
sary distinction between the public
character of the one and the essen
TALLY private character of the other. y
Private Information Printed.
Mr.. Simmons is, Of course, right in
making this technical distinction, but
the disposition of some newspapers TO
reprint on their fina ncial pages ex-
cerpts of brokerage market letters is
fast breaking down the practical sig
nificance Of this distinction. More
over, the flashes sent over private
wires eventually tend to reach a wider
public through the newspaper press,
especially If they contain specific new
informatiOn From the legal stand
point publication consists of making
data available to one other person be-
sides those directly involved.
What Of the criticism that restric-
tions in regard to advertising by mem
hers rob it Of it's effectiveness ]
next asked.
ut NAV we'll be-" Mr.. Simmons con
ceded, that the restricted advertise
ments of exchange members may
temporarily possess less appeal to
some than the more graphic ana WIS
ual fina ncial advertisements some
times issued by less conservative
parties. Yet 1t is felt by many that
in the long run the greater simplicity
of exchange member advertising may
he slperiOr even from the standpoint
of purely sales policy.
"HoWever this may be, it Is neceS-
sary to realize that the exchanges ad-
yertising restrictions were formulated
and enforced for unusual-in fact,
quite unselfsh-reas sons arising out
of the specific business regularly car
ried on by the stock exchange bro
kerage firms.
I'm believing that security specula
ton is a very necessary force in any
growing and progressing country
such as the United States, the ex-
change is supported practically unan'
inously by informed and competent
economic opinion. Yet the practical
problem remains, not only as to just
who under ideal conditions should
speculate in securities, but also just
who should in any way seemsto be
invited by exchange members to dc
so. The general inadvisability for the
small inexperienced investor to en-
gage in security speculation has not
only been recognized by the exchange
but has frequently in the past been
commented upon publicly by it,
Critics agree" pointed out, that
the exchange should insist on truth
in advertising, but why arbitrarily
taboo illustrations, diagrams and
slogans?
The president of the exchange
which has become since the war a
leading world market in securities, Of
fered this defense Of current practice
ITO place all exchange firms on a
completely equal basis obviously some
arbitrary and easily enforceable rule
is inevita able-hence the taboo of IL
Illustrations. diagrams. slogans and
IN, I'D
commercial advertising.
The exchange Is not all blind to the
fact that these familiar means of
rendering advertisements more allur-
ing might in specific cases be employ
ed without particular harm. But the
impra bilty of approving this
slogan and condemning that, of in
dorsing one illustration and banning
another. would in delicate matter Of
this sort seer, obvious"
tCopyright. ig26J