Evening star., 1933-04-06
NEW SECURITY BILL
CLOSELY WATCHED
Financia! Community Anxious
to Learn Details of Pro-
posed Measure.
BY the Associated Press.

NEW YORK, April 6.-With the firing
Of the first gun-through the Federal
securities actin the administration S
campaign to bring back public conf
dence" in security transactions, Wall
Streets bulls and bears" are now won
dering what regulatory policies win be
applied to the New York Stock Ex-
change, largest and most colorful mar
ket place Of its kind in the world
Long accustomed to great freedom in
their activities, as compared with the
practices prevailing in markets of other
are spending anxious moments studying
the pattern followed in the financial
centers Of Europe where strict govern
ment supervision prevails
1t Is taken for granted among the
canyons Of Wall Street that "the new
deaf' envisages some program of Fed
eral restrictions, but it is doubted that
such severe Government supervision as
that in, for instance, Paris and Berlin
will be imposed.
Foreign Exchanges.
The stock exchanges in these cities
are completely under the aegis OF the
government, rigidly controlled as to
membership and activity. The London
Stock Exchange, on the other hand. is
bit like the British constitution, q
matter Of inherited tradition rather
than q code of legal principles. Yet,
even In London, the conservative Anglo
Saxon temperament has resulted in the
establishment of a body of practices
much more curtailed than stock ex-
change practices here.
Members of the Paris Bourse, Frances
largest stock exchange. are appointed
by the President and have the status
OF public officials. The number Of
these Official Stockholders" is limited
to 10. Functioning through an asso-
citation which is closely supervised by
the French government, all members
are jointly and severally responsible for
the liabilities of each individual mem
Der. This feature, coupled with the
limited membership and the monopoly
privilege, has given the association a
unique degree of solidarity, combined
with great financial and social prestige
In the halcyon days Of the pre-crash
era, Wall Street became almost hard
ened to the spectacle of "boy-wonders"
who amassed sufficient wealth, through
luck and skillful trading, to buy a seat
on the New York Stock Exchange. Such
q picture is almost unknown in the
Paris Bourse, because of1cial stock
brokers must be Is years old, must have
served q period Of probation and must
have taken oath as public officials. A
bond of 250,000 gold francs must be
put up with the government. No for
eigner can qualify.
It Is true that stockholders may have
silent partners under certain conditions
and may form q company, but the Of
i1cial stockbroker Is not permitted to
deal personally IN securities, advise in
vestors to buy or sell, or have any
capital invested in outside business en-
terprises. His action is definitely lin
tied to that Of an intermediary" in
security transactions and his compen-
sation Is fixed by regulations. But
trading on his own account, recog-
nized practice here, is banned.
"Middlemen" ON Bourse.
An important part of the Paris
Bourse is the group of "middlemen, +"
who give advice, collect orders and
transmit them to the official brokers,
receiving a percentage of the commits
sion for such q service. The bulk Of
the brokers business, however comes
through the large banks, which handle
thousands of orders from all over
France.
The Berlin Stock Exchange is similar
to the Paris Bourse in point Of strict
supervision by the government. Vary
ing tn degree through the different pc
riods OF her history, Germany continues
to WELD huge disciplinary stick at
commissioner who is responsible for
the enforcement Of all laws and regu-
lations pertaining to exchange matters.
Aside from regular members, the Ber-
lin organization has on its roster "offi-
cial sworn brokers'" appointed by the
government and sworn in by the COM
missioner. Brokerage houses, so in
tegral a part of the American system,
are unknown in Berlin, as the public
has been trained to place orders
through the banking institutions.
Members Of the New York Stock Ex-
change, 1850 strong. have long been
bitterly opposed to Federal regulation.
They contend that their self-imposed
Europe's, and have the added advantage
of fexibility when dealing with emer-
gency situations where time is all. i'm
portant and crises can't wait for legis-
lative medicine.
1t is this fexibility. officials assert, as
much Of the phenomenal growth of a
vast country rich in natural resources,
which has made the New York Stock
Exchange the largest in the world, with
a volume far transcending that of any
other market in history. The ramifi-
cations Of this activity touch every
phase Of Industrial life, and in the
opinion Of these brokers regulatory pro-
posals should be carefully studied so
fr>
more virgin territory.