The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-01-27


long succession of months of un.
precedentedly active trading, and
in new high record prices Tor
seats on the New York Stock tx
change and also on the New York
Curb Association.
To greater extent than ever
before since its establishment ull-
der buttonwood tree in 1892. the
New York Stock Exchange--in
form an incorporated private
club-has become supreme in gov
erning the affairs of speculative
Wall Street. It's would.be COM
petitor, the Consolidated Stock
Exchange of New York. which
purported to be the trading CEN
ter for the little fellow but which
degenerated into a clearing house
for numerous shady brokers, has
ceased to function, and the New
York Curb, a supplementary mar
ket, has come almost completely
under the moral sway of the New
York Stock Exchange.
Partners In Firms
Of the "a governors of the
Curb, eight are actually part
ners of the New York Exchange
firms, and five others, though
not technically members of stock
exchange firms, have their Of
fees with them. Accordingly,
13 of the "a governers-a ma
iority-are directly subject to the
influence and the disciplinary
power of the New York Stock
Exchange. They furnish the bulk
of the reform bloc on the Curb.
The other group, which is COM
posed mainly of So brokers or
floor traders, yearn more or less
for the old days OF free-and-easy
trading. But the prosperity of
the Curb under the, purified man.
agement is an effective weapon
for crushing opposition to the
new regime.
When the Curb went indoors
on June 81. 1921, active member
ships, which recently sold at $751;.
900 each, were available for
$4,000.
Follows Exchange
Out of the present Curb MEM
bership of $50. 1873 brokers are
either partners of stock exchange
firms or affiliated with them.
Moreover, out of SOS associate
members, who do not trade on
the Curb floor but who are en-
titled to the lowest commissions.
400 are connected with New York
Stock Exchange firms.
It has now become routine for
the Curb to follow the stock
exchange in making new changes
in rules of procedure.
A recent Illustration of the
unified front presented by the
two securities was seen in the
restriction of trading in rights"
on the New York Stock Exchange,
which opened up preliminary
trading in rights" exclusively To
the Curb. Moreover, at the same
time both exchanges abolished I'M
restricted trading in when issued"
securities, especially those result
ing from split-ups or stock divi.
dends. which involved opportuni-
ties for arbitrage.
Curb Discipline
Until the Curb went indoors.
less than seven years ago it had
no effective means of enforcing
discipline. Accordingly, the guilt
BILE outsider who traded in Curb
securities used to assume huge
risks of being trimmed.
The transition to trading under
a roof did not bring immediate
house cleaning, as the, Curb was
still under the influence of very
large houses Of questionable repu.
tation. The wholesale clearing
out of weaker and less reputable
houses through receiverships, dis
ciplinary action and the height
ened, activities of the. Attorney
General and the better business
movement, gradually gave the
balance of power to the present
group. which recognizes that
prosperity for brokers lies in fair
dealing with the public. Honest
brokerage gives the public an
opportunity to follow its inclina-
tons in the stock market: 1t does
not prevent spectators from
losing money as a result of bad
Judgment. inexperience, lack of
foresight. absence Of patience or
inadequate financial resources.
The Curb has acted to prevent
use of it's facilities for boosting
the price Of shares, most of
which were in escrow, by manipu-
lating a. minority of free shares.
In so far as feasible, the Curb
will permit only shares of COM
panies whose stock is free to be
listed.
About 1900 securities are now
dealt in on the Curb, which is
still essentially the primary
school, or seasoning ground, for
shares newly offered to the public.
With the stock exchange facilities
already overtaXed, the stock ex-
change is disposed to leave such
securities on the Curb longer than
in the past. AS a result. the Curb
has become an increasingly i'm
pOrtant security mart.
More of a Menace
Although the authorities sus-
pect few isolated cases of buck
citing, they regard the activities Of
publishers of fake tipster sheets
who offer unlisted securities to
the unwary at fantastic prices
and the operations of so-called
partial payment houses, which
sell only contracts to make flu.
tTre deliveries of stocks, as more
widespread and more fraught
with menace to the public inter-
est
The individual who is uncertain
of the ethics and solvency Of Il
broker always has the alternative
OF buying securities directly
through a bank without extra ex
pense.