Evening star., 1930-12-01
CURB ON BANKING
BY BROKERS URGED
Glass Committee May InveS.
tigate Investments by Ex-
change Members.
BY JOHN F. SINCLAIR.

DL JOI1N f. SAINNA<ARs
Special Dispatch to The Star
NEW YORK, December 1.-Should
New York Stock Exchange members dc
an investment banking business in addi-
ton to their regular brokerage bust
ness? This question is being asked
more and more recently. Every one OF
the five New York Stock Exchange firms
that failed this year was engaged In
the investment banking business as well
as the stock brokerage business.
IA brokerage house should no more
be in the banking business than bank
er should be in the brokerage business,
said a New York business man. For
example, those Stock Exchange houses
that got into difficulties in the recent
market decline were houses using their
surplus moneys largely to protect stocks
of companies in which they had a
financial interest"
Why should Stock Exchange house
endanger the accounts of its legitimate
customers by reason of its interest IN
an entirely different line of business?
Some may answer that there is not
enough money in the brokerage business
alone, that every Stock Exchange house
has to have side line, or that the
country has not yet enough business
10 support the thousand active mem
bers of the exchange.
All this, of course, is based upon the
premise that Stock Exchange mem
bership is worth around $250,000
When the Stock Exchange is investi-
gated by the Glass Senate Committee.
there are intimations that this problem
that of operating a banking business
in addition to a brokerage business
will receive considerable attention.
Wage Reductions,
William Green, president of the
American Federation of Labor, calls
every employer who has cut wages a
.public enemy" Speaking of certain
employers in the textile, coal. boot and
shoe industries who have done so, he
says:
1.-THE wrongs which these employers
are perpetrating are against the public
and serve to undermine our national
economic structure at time when the
leaders and the Government and public
spirited people are trying to maintain
wage standards, so that we can faclli-
tate and hasten a return to normal
conditions"
Cutting wages will not solve the par
ticular problem for anybody. But sget-
ting together on a plan to arrest the
dropping price level, however, will help
immensely. Why? Because wages can
not be maintained another IL months,
If the price level continues to drop in
the next II months as it has in the last
IL months-16 per cent. Here is sub
ject worthy of the serious attention of
Mr.. Green and the American FEEDER
alton of Labor.
Canadian Wheat Pool.
The Canadian wheat pool has bor-
rowed an average of So cents bushel
from the Canadian banks on the new
crop.
While the pool itself gave the farm
ers so cents a bushel last Fall, it later
reduced this to SIS and then to SO cents.
So the POOLS payments to date commit
them to about 58 cents bushel.
The Canadian government is under
stood to have assured the Canadian
banks that it will protect the banks
should wheat prices fall below SO cents
a bushel.
So with the banks protected against
loss, and John L. Mcfarland appointed
sales dictator of the pool, conditions
begin to look better in Canada. No
distress selling Of Canadian wheat on
the world market is expected.
Premier Bennett will arrive In
Canada in a few days and then the
question what next, in wheat" Will
come to the front.
Until then, with the Canadian situ-
alton well in hand, the wheat marker
should not be adversely affected by the
Dominion.
Armaments.
Germany wants a detailed report or
Ali land ornaments Immediately sub
mitted to the League of Nations, so as
to give the Disarmament Conference OF
the League a rational basis upon which
further disarmament may proceed.
According to Count Won Bernstein OF
Germany this approach TO the problem
is absolutely necessary. II the world Is
to get anywhere with the disarmament
business.
The European condition-almost uni
versal-of increasing taxes, decreasing
revenue and constantly growing mill
tary expense, is something business
leaders of Europe want to stop.
This latest move is distinctly one II
the right direction.
Sir Josiah Stamp, British INDUSTRIAL
ist and banker. has just told the bust
ness men of Great Britain: III we dt
not solve the gold problem, we shal
all go bankrupt in Europe.
It was this economist who estimated
that the net value of Great Britaln'
financial Wealtn IN 1919 was 9il,o0O,'
600, 600. Now he estimates it at $92
225, 600 900.
With one-fifth of all the gold in thu
world in France and two-flfths in thu
United States. the British and German
financiers believe that the ether two
fifths is not enough TO supply the worlt
and carry on its business. Result:
gold scarcity, causing fall in com
modify prices, and levying its terribl'
burden on those nations who owe mone'
and are not fortunate enough to hav'
much gold around.
George E. Roberts, vice president c
the National City Bank of New York
on the other hand, believes that golC
will flow into every country as soon a
business confidence is restored witt
free flow of capital between nations
the gold problem will take care of IT.
self" says Mr.. Roberts.
In the meantime, plenty of European
countries are squirming over the tigh
situation and the dropping price level
produced largely by the concentrated
undigested world gold supply.
(Copyrtght, 1890, by North American News
paper AIllauce)