Evening star., 1934-02-25
COLLECT
STOCK BILL DATA
Check Alleged Effort of Ex.
change Members to Pre-
vent Regulation.
BY the Associated Press.

By the Associated Press.
Information on the efforts Of the
New York Stock Exchange to defeat
the pending bill for government regu-
lation was assembled quietly over the
week end by Senate Investigators in
an effort to throw some light on the
controversy arising from charges, We
hemently uttered and vigorously de-
MED, that exchange ofiicials have in
cited Nationwide propaganda
campaign"
In New York, Ferdinand Pecora,
counsel for the Senate Banking Com
mittee. and his staff made ready to
place in evidence copies of a letter
by President Richard Whitney of the
exchange, TO heads Of corporations
whose stock is listed on the big board.
together with other documents and
data on the publicity activities of the
exchaage.
Chairman Fletcher Of the commit
tee, author Of the propaganda"
charge, meanwhile declined to make
any comment on Whitney's spirited
denial and counter assertion that II
public opinion backs the Fletcher ac-
cusation. then the right Of free speech
is dead"
Harris TO Continue.
The committee hearings will be re-
sumed tomorrow, with George u.
Harris, member of the exchanges
Publicity Committee, on the stand to
continue testimony begun Friday. At
the committees request he will bring
with him data, which he was unable
to produce at his previous appearance,
in addition to some that Pecora re-
quested be sent yesterday to his New
York office.
In the afternoon Whitney himself
will take the stand to reiterate his
argument against the bill. Pecora
and his associates will be ready with
questions drawn from the long record
of their investigation of stock mar
ket practices In an endeavor to give
point to their contention that the
exchange Is unable to curb repre-
henSible practices and that there
fore the Government should assume
that responsibility.
Further opposition to the bill was
presented BY exchange officials and
members yesterday before the House
Commerce Committee, including an
assertion that the measure would
give the Federal Trade Commission
power to destroy" corporations which
might incur its displeasure. This
argument was presented by Frank r.
Hope, president Of the Association
of Stock Exchange Firms
Attacks Powers.
1.-THE Federal Trade Commission
does not have to convict partic-
ular corporation Of any particular
illegal transaction" he said. but can
regulate it out Of existence by con-
troll of credit, restrictions on new
financing and removal of its securi-
ties from exchanges without in any
way justifying its motive or the
soundness of its judgment.
If this proposal is carried out, the
Federal Trade Commission, through
its control of so many varied phases
of financial and economic life of the
country, may restrict the operations
of and even destroy corporations that
incur ltS OlSplcdSuTt.
Although the measure gives the
right of a court appeal from adverse
commission rulings, he said 1T must
be appreciated that many such orders
and decisions of far-reaching and
fundamental effect will be primarily
administrative orders involving the
discretion of the commission and
might thus not be subject to review
by the court in manner sufficient
to present the full controversy for
judicial review"
Pierce Approves Regulation.
E. A. Pierce, who went to Wall
Street 80 years ago from New Eng
land farm, and virtually revolution
lied the brokerage business, told the
committee he approved regulation, but
not necessarily by the Federal Gov
ernment. The debacle Of 1929, he
said. might have been avoided if the
exchange had imposed a maximum
loan value on securities.
He testified that his firm. E. A.
Pierce g. Co., one of the largest in
Wall Street, had some $4,000 accounts,
and was carrying an aggregate OF
Sc 900 900 in loans on unlisted securi-
ties which he felt were perfectly safe
The bill would require the registration
Of all stock issues.
He said he felt the pending meas
ure was unavoidable" and that its
margin requirements were too rigid.
contending such q provision should
be flexible and easily adjusted to the
conditions Of the moment He ad-
vised as a means Of curbing specu-
lation, the elimination of all accounts
that did not carry an initial deposit
of 81 900. A committee member asked
if he would like to see the bill enacted
as it stands, and he replied:
"Yes. it would drive IS per cent Of
my competitors out of business within
three months, and if could stay
out of Leavenworth or Atlanta, Id
be sitting pretty"
Would this bill tend to keep you
in Atlanta?"
I'D rather be there than any place
I know, if it is enacted. because I'd
be sure of three meals a day, at
least"