Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-14

Suggestions that efforts be made to
curb short selling on the Stock Ex-
change find an echo in public COM
ments, but there is reluctance to in
dorse the idea of legislation on the
subject. 1t is felt that persons ia
miliar with the details of stock trad
ing should give attention to the mat
ter, because of their familiarity with
the needs of the situation. The prob
lem IS put in the classification of highly
/ technical things which should be ham
died by experts.
1T is unquestionably true" thinks
| the Baltimore Sun, that there Is a
considerable popular fury against short
selling" That paper recognizes that
there are probably times when use of
this mechanism can be generally dam
gerous, just as there are times, as they
were toward the peak of the bull mar
ket in 1929, when failure to use it can
be equally dangerous" The Sun. how
ever, concludes: Regardless of the
faults and virtues of short selling, on
which no blanket judgment is offered
; here. far greater public understanding
Of what is involved than prevails at
present is essential to any intelligent
scheme of public control Steps to
promote this enlightenment are far
more to the point at this time than tips
on how to placate the storm against
/ short selling that is said to be brewing
IN Congress by speedy voluntary ac-
ton
1t is recalled by the Dayton Daily
News that the Stock Exchange forbade
bear operations for a while in the Brit
ish crisis, but now the bear is loose
again. with a threat of congressional
action hanging over his head" The
Daily News adds: THE 1881 bear. ma
LOT inv cfa YNrtOa - - do
lays recovery from the depression. The
1929 bulls, manipulating the market
upward, precipitated the depression.
Why pick on the bears?" The Roches-
ter Times Union comments: 1T looks
as though drastic regulation may be
expected from Congress unless those
who operate upon the stock market
take upon themselves the business of
correcting any evils which may exist.
1t would be much better for them to do
so than to continue to defy the light
ming of official investigation and regu-
lation."
: "An investigation might be Clarity
ing" thinks the Louisville Courier
Journal. but rigid governmental regu-
lation is to be applied with caution. Its
very regidity frequently defeats its own
object. It is so in the system of jus
tice, where it is insisted that Legisla-
lures should allow the courts more lat
itude in adapting codes of practice to
conditions. The law of custom cannot
be ignored safely in any form OF barter
and trade. ANY reform proposed should
be initiated by Stock Exchanges, sub
iect to revision in detail according to
the dictates of experience"
I Congress may in due course pass
/ laws prohibiting short selling" says the
Sioux Falls Argus-Leader, but the
only result will be another impeachment
to the free trading that should char
acteriZe a securities market" That pa
per holds that elimination CT snort
selling will not change the trend" and
advises that experience with the gram
exchanges is sufficient to show intelli-
gent men the futility of the schemes
now proposed" -.
The threat of Federal legislation"
according to the Houston Chronicle, is
! likely to take concrete form unless the
| exchanges themselves curb the prac-
| tice.' Noting, however that the ex-
! changes are indispensable adjuncts TO
corporate development in this country,
| the Chronicle voices the warning: TO
change the condition by eliminating ex-
change transactions would radically
alter the basis for all investment in the
country. The volume doubtless would
be curtailed. and the fluidity of support
fer different industries would be de-
stroyed. Because there Is Widespread
misunderstanding of these facts among
the people generally, there is a great
deal of misdirected opposition to the
exchanges as such, their legitimate as
well as their illegitimate functions.
Short selling appears now not only as