Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-14
EXCHANGE OPPOSED
TO MARKET RAIDS
Remedy for Wholesale Selling
by Bears Is Sought
by Officials.
BY the Associated Press.


NEW YORK. October 14.--Agitation
for caging the bears blooms like Q
hardy perennial in the valleys of stock
market depression.
Wall street, on slim diet these days.
has been considering the serious in
vestigation Of the roots of this idea In
search of sustinence. Perhaps, at last,
1t may be found useful as well as col
orful.
Few, indeed, have been the occasions
in the history Of the stock market when
restraints have been placed upon short
selling, for exchange officials have ira
ditionally maintained that the short
sale is an essential principle in the
economics OF an open market.
Opposes Wholesale Raiding.
President whitney of the exchange,
In explaining its attitude toward the
short sale, pointed out last week that
the effects of bear drives are largely
psychological. The bears bitterest enc
mics assert that in unsettled times 1t
Is this unfavorably psychological effect
that Is most damaging, that induces
wholesale liquidation by worried in
vestors and sends prices to levels de-
structive of real values.
Mr.. Whitney made 1t clear that ex-
change oflcials are emphatically OPP
posed to bearish operations tending to
demoralize the market and crush prices
to artificial levels. With the general
levels OF share prices at the levels. OF
three years ago, Wall street Is wonder
ing If prices are not already artificially
low and II plan will not yet be de-
ViSQ0 tn tame rQmDant bears.
The relative importance of bear raids
in bringing about the latest crash In
share prices remains an open question,
but interests favoring thorough-goinB
bear roundup insist that the situation
has been unnecessarily aggravated by
reckless short selling, and assert that
investors would feel more secure In hold
ing stocks, or increasing their holdings,
II they could be assured that destruc-
tive influences were being eliminated.
It has been pointed out that the ex-
change, while not prohibiting the pub
lie from selling short, might restrain It's
own members from lending stock for the
purpose of short selling, which would
make the operation difncult.
Bears argue that no restraints were
placed upon the bulls who were iHstru-
mental in bringing about that serious
imitation which resulted in the stock
market crash last Autumn, but others
believe that one extreme need not neces-
sarily be followed by another, and that
It cannot be argued that 1t is too late TO
make COURAGEOUS efforts TO achieve
greater market stability.
Not since trading was resumed after
the shutdown In 1914 have restraints
been placed upon 1t checking short SELL
ing. At that time trading was held for
period to a strictly cash basis. In
| 1917 and again last Fail the exchange
! called upon members for information
disclosing the identity and extent of
the short account, but clearly explained
that it was not prohibiting short SELL
ing, and the information it obtained
| apparently was not very helpful in con-
trolling the situation.
Largest Stakes.
After ALL Wall Streets greatest stakes
are always on the bull side and the
only reason that bears are not re-
strained in unsettled times seems to be
that a salts sctory means of restraint
is lacking Furthermore, Wall Street
has always been inclined to regard
price regulation as economic insanity,
holding that only such prices as are
reached in a free market are real
| prices-that regulated prices are arti-
fetal prices.
Although current stock prices may
now be regarded as artif1cially low, Of
ficials of the stock exchange can
scarcely be expected to decide the true
values. If the exchange we're to es-
tablish precedent for restricting trad
| ing when prices went downward, 1t
would probably find q varying group of
bulls clamoring for restrictions much Of
| the time.
| If the exchange can find a satisfac-
tory means of preventing extreme and
unnecessary depression of prices. most
observers believe 1t will have made a
great step In economic progress.