Evening star., 1934-10-31
CHANGES ADVISED
IN SECUR|T|ESACT
Report of Commissions
n
Own Group Revealed at
Bankers Meeting.
BY CLAUDE A. JAEGER.

Copyright 1884. by the Associated Press.
WHITE SULPHUR SPRINGS. w.
Va. October 3l.-Drastic simplinca-
ton Of corporate reporting require
msnts under the Federal securities
legislation, not only to relieve the
burden upon corporations, but to pro-
tect the investor, has been urged upon
the Securities and Exchange Com
mission by an advisory group Of ac-
countants formed at the request OF
the commission, 1t was learned au-
thoritatively today.
These recommendations were sought
by the commission in It's program to
clear away all possible red tape In its
administration of Federal securities
laws and 1t still is understood to have
the accountants report under consid-
Grafton. This program Of the COM
mission has been widely praised by
bankers attending the Investment
Bankers Association Convention,
which ended here today, as likely to
prove an important factor In reviving
corporation financing.
Too Rigid, Is Complaint.
The committee Of prominent ac-
countants, selected last July for the
commission by the New York State
Society Of Certified Public Account
ants, states that the substance, not
the form. of corporation financial
statements Is important. and II too
rigid rules are laid down the result Is
such q mass Of technical data that
the investor Is lost In . labyrinth Of
figures.
The complaint Of too much detail
has been repeatedly made about the
requirements for issuing new securities.
Issuers become liable under the securi-
ties act for damages II any material
fact" is omitted, and they have felt
obligated to file hundreds Of pages Of
detailed technical data and informa-
ton.
The accountants assert that the in
vestor may be misled into placing too
much importance upon financial
statements.
Investors relying upon financial
statements" their report said, should
know that such statements reflect q
combination Of personal judgments,
accounting conventions and recorded
facts"
Uniformity Held Not Feasible.
The investor, when considering the
record of earnings and the latest bal
ance sheet, should remember that the
future value of his investment de-
pends in large measure on factors
which cannot be shown In financial
statements"
The accountants were skeptical Of
the feasibility of uniformity Of cor
porate reporting. save in SO Tar as 1t
may involve few general principles.
They were not even enthusiastic
about enforcing all corporations to
issue reports on q quarterly. rather
than an annual. basis, pointing out
that the business Of many corpora
tions Is subject to sharp seasonal
fluctuations.
The accountants said much fiexi-
bility In making statements should be
permitted.
Act Held Workable.
Publicly holding out the olive
branch toward the New Deal, but
with some privately insisting that re-
assurance regarding monetary and fis-
cal policies is needed for real revival
Of their business the investment bank
ers ended their annual convention to-
day.
Federal securities legislation, con-
demned as unavoidable q year ago,
was described as workable, although
cumbersome and the security dealers
were urged by their leaders to re-
sumo their functions Of providing long
term capital for industry. The asso-
cations Public Service Securities
Committee even recommended that
the vehement protests Of the past
against Government ownership Of elec-
trio power properties be discontinued,
and the controversy settled by actual
test Of relative efficiency between pub
lie and private properties.