Evening star., 1931-12-17
FIXED LOWS SEEN
SHORT SALES CURB
S. o. Levinson Discusses
Plan With London Finan-
ciaI Expert.
BY NEGLEY FARSON.
BY Gable to The Star.

BY Gable to The Star.
LONDON, England, December II
Bear selling. with is resultant panic
and liquidation. could be prevented on
both the New York and London Stock
Exchanges, according to IS. O." Levin
son. internationally famous Chicago
corporation lawyer. who has discussed
a plan With that aim with a London
financial expert.
1t is quite possible" declared Mr.
IeVinSon. TO place minimum prices
upon each listed stock. This can be
done by officials Of the exchange Off
CialS of the New York Stock Exchange
cid this identical thing in December of
1914"
Explaining how New York closed its
exchange August |, upon the advent
of the World War, and kept it closed
until December l, Mr.. Levinson con-
tinued:
Minimum prices were then put upon
all stocks to prevent the slaughter of
prices and cold-blooded short selling.
The exchange was opened only On con-
dtiOn that no stock could be traded in
at price lower than that stated. These
prices represented substantially the
price at which the stock was last
traded in Immediately prior to the clos
ing Of the exchange in August
Can Apply Minimums.
The public thereby was protected
against serious and forced liquidation
and the ability OF professional bears to
take advantage OF the situation to de-
press prices for their own greedy profit"
Mr.. Levinson, whom Foreign Minister
AriStide BRAND of France hailed two
years ago at The Hague as the real
father of the Kellogg pact" and whose
tot hot loe ,Ot
the ghost Of a chance of securing a re-
ductlon in war debts unless this is
accompanied by real reduction in ar
mamentS has been so widely and promi-
nently quoted in the British press,
asserts that both London and New York
can apply the minimum price method
now to halt falling movements on their
exchanges.
1T should and could have been done
some time ago" said Mr.. LevinSon. In
the face of the present depression this
could have been reSorted to when the
officials of the New York Stock EX-
change saw that stock had reached, and
were falling far below the level Of their
actual asset or liQuidating value
This point was passed some eight
months ago. Since then. caught in the
very momentum of the downward move
ment. tirSt-ClaSS as we'll as mediocre
value American stocks were swept to
low levels unknown for 60 years. Selling
became psychological as we'll as forced.
1t could have been stopped-at least it
could have been halted for a period of
time to allow reason and reaction to
set in
Plan Worked Beautifully.
For two months, Mr. Levinson point
ed out, New York operated this min
S,N,1, OH roI
beautifully" Under such restrictions. in
time seml-paniC stock prices were locked
and could not go down further, liquida-
ton or forced selling movements were
held in check, and when the Exchange
reOpened it was in an atmosphere of
what President Harding would have
called "nOrmalCy."
If the New York Exchange had
taken this action eight months ago"
insisted MIR. LevlnSOn. billions of dol
lars would have been saved, scores of
banks would have escaped receivership
and the buying power of the public
would not have been impaired 1t would
have saved millions Of people from ruin
who had bought securities on the in
staIlment payment system, and nobody
would have been the loser by such ac-
ton"
Showing what effect such arrested
cAiO4I SSIIu!S NCuIQ nave ndQ on JNe
United States financial structure. Mr..
1eTlnson pointed out that the banks
would not have been compelled to sell
securities to keep liquid. Runs on
banks would have been avoided and the
entire economic structure of the coun-
try would have been preserved.
The latest failure of nine Boston
banks is a sinister example of the
vicious circle 1 have just been describ-
ing-fOrced liquidation, more short SELL
ing and more forced liquidation" he
said
Mr.. LeVInson took pains to point out
that his suggestion Gid not favor or at
tempt to support prices at high levels,
but only aimed to check their fall below
what every economist knew was their
true Valu7. Levels to which. on the
New York exchange. now both stocks
and bonds have sunk is a disgrace to
American finance" he remarked, con-
tinuing:
IF some one not interested in pro-
feSSional short selling and the forced
liquidation caused thereby would rise TO
explain Why this protective action was
not taken. his would be welcome face
to all AmeriCans-their name is legion
who possess listed securities. These lat