Evening star., 1933-12-29

Reports Of the possibility Of amend
ing the Federal securities act are made
the subject Of debate in which friends
and enemies Of this law express their
conclusions. 1t is urged in behalf Of
the legislation that 1t has given In
vestors sadly needed protection. De-
tenders of the proposal to amend con-
tend that business enterprises that have
been deprived of the use Of needed capi-
tai through this legislation have SUI
fered serious damage because Of un-
certainty as to penalties attached to
the law.
Conceding that there have been
comparatively few new security issues
since the act took effect" the Topeka
Daily Capital points out that there
have been few municipal issues either"
and adds that "a time when capital
goods industries have been marking time
is not one to call for many new securi-
ties for plant Improvement and ex-
pansion"; that eff there had been no
Federal securities act, there would have
been relatively few new issues" The
Capital quotes Commissioner lands Of
the Federal Trade Commission as stat
Ing that the measure .;. has forced a with. an.
hundreds of millions of bad stocks away
from an unsuspecting public that
"the commission, in enforcing the act,
has compelled registrantS Of new Securi-
ties to disclose the disagreeable facts,
such as secret promoters, underwriting
profits, overcapitalization. etc, which
many of these registrants have done
their utmost to conceal" The Kansas
paper feels that directors of corpora
lions too often are ignorant of the ac-
tual facts Of their companies" and that
1T is the intention of the Govern
ment and Of the public to make larger
requirements than in the past upon
directors"
THE compliments, in a word" thinks
the Morgantown Dominion News, "ob-
ject to the simple requirement that the
prospective purchaser be given all the
facts when his attention is invited to
any particular issue, with the purpose
Of inducing him to invest" The
the law with the statement: Millions
in proposed flotations have failed, the
compliments say, because OF the rigid
requirements of the securities act The
complaint, no doubt, is based on facts.
But potential investors still have their
money and the owners of the offered
securities still have them. If the repre-
sentations of the promoters were true,
they are not the worse for failure TO
make q trade. Promoters find the law
a throttle to business Perhaps 50,
but to what kind of business?"
The same paper notes the fact that
Senator Fletcher, chairman of the
Senate Committee on Banking, is of
the opinion that the act should be
amended to require details Of all stock
issues not provided for in the original
measure"
ITO attribute the lack of offerings
OF new securities to the influence Of the
new law is to ignore the facts" con-
tends the Fort Worth Star-Telegram,
recalling that 'the dearth Of new
financing was quite as severe preceding
passage of the act as 1t Is at present, "
and citing President Aldrich of the
Chase National Bank. as conceding be-
fore the Senate Stock Market Commit
tee that ''the real barrier was lack of
public confidence" The ar-Telegram
believes that few changes are required
to put the securities measure on thor
oughly practical basis" and voices the
Judgment as to the situation that exists:
Many far-sighted investment bankers
admit the value of the principles Of the
securities act, and seek only to make
them workable. Many others give Liz
service to the new creed that the truth
| the whole truth and nothing but the
truth must be told about offerings oi
new securities, but in their hearts lone
| for q return Of conditions that prevailed
before the stock market crash"
Speaking In favor of amendment. the