Evening star., 1934-02-06
REPORT SOFTENS
SECURITIES LAW
Roosevelt Studies Recon-
mendation to Relax More
Drastic Provisions.
BY the Associated Press.

BY the Associated Press
President Roosevelt today had be-
fore MIN an official report suggesting
the possibility Of relaxing the much
criticized liabilities provisions of the
truth in securities act
The report was stated authorita-
lively TO have been submitted BY three
OF the five members of an admins
tration committee headed by Assist
ant Secretary of Commerce Dickinson
Mr.. Roosevelt is known to be pre-
pairing recommendation for some
congressional amendment of the Sc
curities act. Previously he submit ed
TO the congressional committee re-
port from the Dickinson Committee
on Control of the Stock Exchanges.
Chairman Fletcher of the Senate
Banking Committee shortly will in
troduce bill making it a criminal
offenSe to engage IN pool operations
Some members of the Dickinson
committee were reported today to feel
that the liabilities provisions of the
securities act could be lesSened with
out reducing its effectiveness as a
protection to investors
Protested by Bankers.
The act has been criticized by in
vestment bankers and leading business
associations as preventing the issu-
ance Of new securities and thereby
slowing the flow of capital The pres
ent law makes all participants in the
Notation OF a security liable for full
r;
statement of fact about a security
James Lands of the Federal Trade
Commission and Arthur Dean. New
York lawyer and securities expert. are
members of the Dickinson Committee
but neither helped draw up the Sc
curltleS report 1t was written by
Dickinson, Henry Richardson. WASH
ington lawyer. and A. Berle, Columbia
University professor.
The suggestions of the latter three
would. in a general way, tend to make
the promoters liable in a way similar
to that stated in the British securi-
ties act and would further attempt TO
make some differentiation as to the
proportionate liability OF the diff erent
participants in the f1otation.
The British act fixes damages in
the amount actually sustained as a re-
suit Of particular omission or mis-
statement and not for losses incident
to other factors.
Differences Cited.
Committee members were said to
believe that, while the liability in the
American act is unduly broad they
still agree with more active propon-
entS of the present law that it should
be more severe than the British. This
stand was reported taken because the
American legal system makes it more
olincGlt TO reach satisfactory decisions
IN the courts on matters of this kind.
In comparing the American act with
the British. the committee noted five
major points where the American act
is more severe. These were the num-
Der VINO may sue. the number who
may be sued. the measure of damages,
the standards of care and The kinds of
action.
member of the committee was
quoted as saying the present act
which he believes has prevented many
a tendency to attract more risky spec
ulators who were willing to take q
chance on the laws complexities On
the other hand this member said. con-
serVatlve promoters and the corpora
ton directors would tend to hold back.
The question of whether the act has
materially retarded the flow of capi-
tai was held by committee members
as not susceptible to complete proof,
but they believed a Slight relaxation
would tend to obviate future complaint
that the act was obstructive.
The legislation to make it a crimi-
nal offense to engage in pool opera
tions was proposed yesterday by Sena-
tor Fletcher. who told newspaper men
he had almost completed the draft of
bill to supervise stock exchanges
through the Federal Trade Commis-
sion and license system.