Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-15
PRESSURE TO CURB
BEAR RAIDS SEEN
IN MEETING HERE
econtinued FROM First page.l

Continued From First Page)
with regard to the stock market COL
lapse President Hoover long has been
leading advocate of the principle Of
less Government in business" It is
certain he would resent any suggestion
that the Government is seeking to med-
die In private financial affairs.
Meeting Regarded Significant.
The fact that Mr.. Lindley was in
cluded In the White House conference
seems significant. Had Mr.. Hoover
merely wished to inform himself re-
garding conditions on the market, Mr.
Whitney, who is an old friend of the
President, could have given the advice
without assistance. Since Mr.. Lindley
Is head of the committee of the ex-
change which is charged with keeping
tab on the conduct of its members, it is
probable there was discussion of meas
ures the exchange might take to meet
the problem.
Mr.. Whitney himself Is on record as
opposing any move to prohibit short
selling as general proposition. In a
recent address on the subject, how
ever, he declared it was his personal
belief that 1t is not proper "for persons
to sell stocks in a volume and in a
manner which is calculated to depress
prices artifcially." He added that the
exchange does not defend nor look with
favor on short selling "of this char
acter."
Normal short selling" he asserted,
is an essential part of a free market
in securities. The prohibition of all
short selling, which might result in the
destruction OF the market, is too high
a price to pay for the elimination of
the few who abuse this legitimate
practice"
Investigation May Result.
Numerous suggestions have been adj
vanced from time to time as remedies
for the abuses mentioned by the Stock
Exchange president. Legislation by
Congress to curb short selling entirely
Is one proposal that has not met with
success because Of the strong oppose
ton aroused in financial circles. It
seems not unlikely, however, that a
congressional investigation of the mar
ket depression may result from the
present agitation.
discourage this type of speculation has
been suggested. A drawback to this
plan is that, to avoid charges Of dis
elimination it would be necessary also
to tax bull excuses.
Application to stocks of the cotton
market rule which suspends trading for
a day when prices have broken a speci-
fed number Of points also has been
proposed.
A drastic cure, but one that the Ex-
change itself would vigorously oppose,
Mr.. Whitney indicates, is elimination OF
all marginal trading in favor Of strictly
cash transactions.
Has Sanitary Effect.
Reports from Wall Street today were
that a salutary psychological reaction
win result from the news that the
White House has interested itself in
the market problem This is possibly
exactly what the President wishes to
accomplish. It was recalled that when
the exchange last November asked its
members to supply information designed
to show the extent Of short selling, a
beneficial effect was immediate.
That the exchange, or at least some
members of it, already are taking steps
to curb short selling was indicated in
dispatches telling of the policy of GER
tain commission houses in tightening
up on stock loans. This policy, which
makes it. difIioult to borrow against
stocks sold short, is said TO result from
fear on the part of the commission
houses that they might contribute to
the artificial depression and thus dis
courage legitimate investments.