Evening star., 1934-04-24
WILBUR EXPLAINS
INVESTMENT CODE
More Than 200 D. c. Deal.
ers and Bankers Told of
Enforcement Aims.
BY EDWARD C. STONE.

manager of the Investment Bankers
Code Committee. explain in detail the
aims of the newly adopted code of
fair practices at meeting held late
yesterday at the United States Cham
Der of Commerce. How the regula-
tions should protect investors also was
stressed by the speaker and by Paul
v. KeySer, counsel of the Investment
Bankers Association of America.
Mr.. Wilbur assured the investment
bankers at the session that the en-
forcement of the new regulations
would be fair and he urged that those
in the business study the rules and
abide by them He announced that
the code will be enforced through
code committees in the various To-
calitieS. The local agencies will work
as fact-finding, constructive agencies
He assured the group that the code
was going to work, would be prac-
tical and we are not going to have a
lot of trouble over it."
The fair-practice rules apply to all
investment bankers whether they reg
lister under the Code or not, Mr.. Will
bur said. pointing out that it would
be to the dealers protection and bene-
fit to register, as any difficulty with a
registered dealer could be corrected
by the Code Committee and by self
government of business Members of
the business have no need for fear. he
said, unless there is an injury to q
customer or to the public
Protection for Investors.
One of the highly important fea-
lures of the code is its requirement
that continuing and detailed informa-
ton shall be provided for investors so
long as an issue is outstanding in the
hands of the public" Mr. Wilbur con-
tlnued, information on securities and
the issuer is essential, but it is only
one part of what the investor should
have. 1t is just as important that the
investor know the position and inter-
est of the investment banker in
securities transaction. For instance,
is the investment banker acting as a
principle or as an agent?'
Many questions were asked from the
floor following Mr.. Wilbur's address.
They were answered by Attorney
KeySer, a Washington lawyer. who has
worked for the Investment Bankers
Association many years. He spent
great deal of time on the legal points
involved in the new code. being paid
a great tribute by Mr. Wilbur for the
satisfactory results. After explaining
many technical points, he urged keen
study of the code by every investment
dealer.
The code proponents hope they
have dealt severe blow to f1y-by-
night security statesmen. the high
pressure kind who always are getting
investors to switch good security
into a poor one and those who seek
unjust commissions. The code covers
new securities and the millions of old
issues still outstanding. Mr.. Wilbur
asserted. The code trainers feel sure
that sufficient provisions have been
made for real enforcement. They
also believe that self-regulation will
60 long way in curbing the need of
further Government regulation
Francis G. Addison, jr., president of
the Security Savings g. Commercial
Bank and chairman of the Better
Business Bureau, presided, the bureau
sponsoring the meeting. Director
Louis Rothschild and Y. E. Booker,
member of the Southeastern group of
the Investment Bankers Association,
arranged the program. and W. l.
Hartman, president of the United
States Chamber of Commerce, sent
letter lauding the code and forecast
ing brilliant results from its adoption.
Advancing Prices Forecast.
In its weekly investment review,
Rhodes, Williams & Co. says that the
collapse in commodities last week was
purely the result of an overbought
speculative position induced by the
expectation of an extreme form of
currency expansion. President Roose-
velt, however. made it abundantly
clear that there will be no such legis-
lation. At most the dollar can be de-
valued to so cents in terms of its
former gold value. which is the limit
of the presidential authority, and such
q minor devaluation could have little
effect on the securities market.
There is, nevertheless, an immedi-
ate expectation of higher prices-not
only for securities, but for everything
This Is to be found in the almost in
credible expansion of Federal Reserve
member bank credit. So far this year
these credits have increased by nearly
$1,000 100000 against an increase of
more than 81 300. 900, 900 in member
bank deposits. Now, compare this
with the increase of a little over 81
OO0,000,000 in member bank credit
during tho threo-uaor oorioI arIi,,r
March, 1929.
In those same three years member
bank deposits increased less than
S400,o00000. 1t becomes apparent
that credit expansion Is going on at
the present time at the greatest rate
in the history of the country. 1t is
an irresistible force toward higher
prices, the brokers add.
Dividends and Other Notes.
Emerson's Bromo Seltzer. Inc, has
declared the regular quarterly divi-
dends of so cents on the class A and
B common stocks, payable May l to
stock of record April e. The "A"
stock is listed on the Washington Ex-
change.
Chairman Leo T. Crowley of the
Federal Deposit Insurance Corpora
tion, is taking the case of Western
bank which is the first to close under
the new insurance plan. All de-
positors having $4,000 or less in the
bank will receive payment in full as
soon as claims can be proved and
checks forwarded.
The Maryland Casualty Co. filed
application with the Baltimore Stock
Exchange for listing its junior con-
vertible series B preferred shares,
stock designated for Offering only to
citizens of Maryland
o. Howard Wolfe, a Philadelphia
banker well known in Washington.
took an active part in the Auditors
and Controllers regional conference.
George w. Norris, governor of the
Federal Reserve Bank of Philadelphia,
also addressed the more than 200
bankers present.
Today's Trading on Exchange,