Evening star., 1933-04-02
KUHN, LOEB BACKS
SECURITIES BILL
Investment Bankers Asso.
citation Also Voices Ap.
provaI at Hearing.
BY the Associated Press,

by the Associated Press.
The Wall Street investment bank
ing partnership Of Kuhn, Loeb g. Co.
and the American Investment Bankers
Association were placed on record yes
terday as approving the Roosevelt Sc
curities regulatory bill before the House
Interstate Commerce Committee.
George w. Bovenizer of New York, a
partner In Kuhn, Loeb & Co., told the
committee his company was whole
heartedly back of this legislation. 4"
Frank M. Gordon Of Chicago, president
Of the American Investment Bankers
Association, assured the committee the
proposal has the entire approval of our
association"
Both requested that changes be made
in the legislation to clarity its terms.
Gordon secured permission from Chair
man Rayburn to delay further hearings
until Tuesday to permit Paul w. Key
ser Of Washington, counsel. to present
changes to be proposed by the Invest
ment Bankers Association.
Only Part Of Program.
Approval by these witnesses came
after day Of developments In which
Huston Thompson, former Federal
Trade Commissioner, and Ollie M. But
Ter, Commerce Department attorney,
who helped draft the measure, disclosed
that this bill Is only one part Of Presi-
dent Roosevelt's contemplated program
to correct what they termed abuses"
in the securities field.
Thompson said that undoubtedly
legislation covering operations of in
vestment bankers would be requested
Of Congress subsequently by the Presi-
dent. He stressed, however, he was
speaking without authority, but made
the statement In reply to questions re-
garding supervision Of investment
bankers.
The broad power the present meas
ure would give the Federal Trade Com
mission to revoke registration of cor
porate securities meanwhile was ques-
toned by Rayburn and other members
Of the committee.
They contended provisions to permit
revocation on the ground that affairs
OF corporations "are In unsound con-
dition" or are not based upon sound
principles would make it obligatory on
the commission to investigate all cor
porations and guarantee safety to in
vestors.
Bill to Be Revised.
After the committee meeting, Ray
burn said ''the bill will have to under
60 considerable revision, but its prin-
ciple as proposed by President Roose-
velt, will be retained"
He indicated the measure may not be
reported until late this week in view
OF the two-Score amendments already
under consideration by the committee.
Meanwhile, Senator Gore, Democrat.
OF Oklahoma, recommended to the
Senate Banking Committee, also hold
ing hearings on the bill, that the Sc
curities bill should be limited to the
furnishing Of pertinent information to
the Trade Commission. leaving 1t to
the investors to decide whether to
buy securities.
1--WE ought to proceed on the theory
that most people are honest and some
emily" Gore said. II don't want a
stroke Of paralysis to fall on business
already prostrate All you can do Is
to require the facts be authenticated
and made matter of public record" !"
Henry Woodhouse New York econom-
ist, told the House Committee that If
the provisions questioned by Rayburn
were retained this bill will close down
two-thirds of the industries in this Ma
tion and throw 10000, 900 people out Of
work"
New Era" Foreseen.
In his testimony, Bovenizer said
Kuhn, Loeb & Co. viewed the pres
ent legislation as q move to restore "the
good old name Of investment banker,
which has been dragged In the mud for
the past IL years"
"A lot Of people are In the investment
banking business who should never
have been In the business" he said.
I'VE view this legislation as opening a
new era. We favor full and honest In
formation on security issues"
Answering Representative Huddies-
ton, Democrat, of Alabama, Bovenizer
said that information on issues given to
the Trade Commission for public in
spection should include whether the
concerns issuing the securities had ever
defaulted on principal or interest pay
ments, and net income and profit on
income.
II think the stockholders are entitled
to know what the corporation is doing. !"
he said, adding that Everything of in
terest to the investor should be made
public" even the amount Of commits
sion investment bankers are to receive
from floating issues.
7 see no objection to making public
the commissions" he said.
1T may slow up an issue, but since
the public has been educated as It has.
think 1t would consider 8 per cent