The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-03-14
YOUR BUSINESS AND NINE

LEW persons realize how intimste ly the
New York Stock Exchange is tier into the
lives Of the average citizen of the country.
One family in every three las a direct stake
through ownership of steaks or bonds and
majority of the people have an Indirect inter-
est through investments of banks and insur-
ance companies in stocks and bonds, accord
ing to very enlightening and comprehensive
study made by thirty foremost economists for
the Twentieth Century Fund. It is published
under the title Stock Market Control"
(Appleton- Century.
Figures showing the interrelationship are
startling and give a clew to the active CAM
paign by the Roosevelt administration to make
federal stock market regulation a part of its
new deal economic program. The campaign
is designed not only to protect the investor
from losses caused by the occasional gyrations
of the market but to safeguard that great
mass of citizens whose welfare is wrapped up
in banks and insurance companies.
"The collapse of security values since 1929
has been one of the aggravating causes of the
closing of at least 5000 banks in the United
States, involving total deposits of SO, 5OOO O0,-
000," the book comments.
And the clearing house through which
these investments are handed-the New York
Stock Exchange-"has the same sort of legal
entity as a private club" remarks the book
in describing the power of the organization
which the senate banking committee has
shown to be controlled by a handful of men.
The great difference between the Stock
Exchange and any other social club lies not
in its legal status but in the intimate rela-
ton between the activities of its members in
the clubhouse and the economic and social
welfare of the people in the United States"
it continues
Even though the exchange itself does not
trade in securities the way in which its mem
beers trade is both responsibility of the ex-
change and vitality related to the public
interest
Yet in spite of this public concern the
public has no more control at present over
exchange practices than it has over the way
the members of the Racquet and Tennis Club
play squash on its courts, except, of course
that the relations between brokers and their
customers are regulated by appropriate state
laws.
The government of the New York ex-
change is the exclusive right of its 1875 men,
bers and is exercised by governing commit
tee of forty and a president and a treasurer
elected by the membership-the two officers
for one-year term and the committee for
four years.
Its powers both legislative and judicial
are exercised directly by the committee or
through fourteen standing committees, of which
the most important are the business conduct
and listing committees. Although they are
very powerful appeals from them can be
taken to the governing committee, the power
of which, in practice, is almost absolute"
The history of the exchange, the book ex-
plains, shows growing tendency on the part
of its governors to institute reforms in its
practices-especialy at times of great public
criticism
This is the organization which has such
powerful influence in the investments of the
nation 1t is estimated that eighty-f1ve out
of every 100 exchange transactions in the
country 60 through either the New York Stock
exchange or the New York Curb with the re-
naming fifteen scattered through the thirty
five other exchanges.
From a third to half of the annual saw
ings of American individuals and corporations
or from "a OOO, 900 900 to s6OOo,OOOO00 in nor
nal years-fows through investment chan
nels into securities of various kinds which are
traded in and evaluated in the organized and
unorganized security markets. says the Twen-
tieth Century Fund study.
Nearly half of our entire national wealth
is represented by transferable certificates OF
ownership or NEUTRALITY-SUSPICIOUS. and bonds
which are bought and sold in these markets.