Evening star., 1934-02-25
Old Man "They" to Lose lob
if Regulation Bill
Is Passed.
BROKERS WATCH STEP
IN ADVISING CLIENTS
Results of Proposed Reforms Al
ready Felt as Wall Street Adopts
Seller-Beware" Rule.
BY LEMUEL F. PARTON.

Special Dispatch to The Star.
NEW YORK, February 24.-The
new Fletcher-R -Rayburn bill, to regu-
late the Stock Exchange, will, if it
is passed, outlaw and Danish the most
powerful parsonage Of Wall Street
the one most frequently quoted, most
carefully heeded-one whose lighteSt
word may cause convulsions of the
ticker.
His name is They" person who
obviously must always wear quotation
marks like permanent earmuffs
While the new bill does not name or
formally prescribe this individual, it
makes it clear that President Roose-
welt. having ousted that other ear
muffed dignitary, "the White House
spokesman" is going to do the same
for the busy and ubiquitous old man
They"
The proposed bill bans, as criminal
conSpiracies, what are loosely known
as pools, organized to put stock prices
up or down. Pools could not work
without They" Just a whisper, at
tributed to this remote and august
parsonage and turned loose in the
Street, has implemented the pools in
the past. He has been their whole
backfield. in fact, running down the
field under long forward pass, and
without him they are benched.
All Efforts Restrained.
Specifically, the bill forbids officers
or directors of listed stock firms to
speculate, and with equal precision it
cracks down ON any overt effort OF
any kind to advance or lower the price
of securities. 1t is rigged so that any
showing of any effort thus to manipu-
late price movements will bring on a
Federal investigation. With such ma
nipulation thus sweepingly and elab-
orately barred, They joins the ranks
of the unemployed For that, since
the days Of the Wall Street button
wood tree, has been his job. The
President would cut the ground from
under him.
So stringent are the exactions Of
the bill that brokers already are care
fully watching their step, even with
the imminence of its passing. Buy a
share of stock today and the broker
carefully tells you that he Is not
urging you to buy it. If, at your re-
quest, he investigates and reports on
the financial condition of the COM
pany, he is at great pains to make it
clear that this inquiry Is quite inde.
have or ever had in the stock Seller
beware" is already the rule of the
Street.
As the law very specifically applies
also to customers men, to order clerks
and all other persons connected with
brokers' offices, there is everywhere,
in all contacts, the same caution and
scarcity of information. The main
idea seems neither to know nor sus-
pect anything at all about a stock
and to pass it out with a pair of
tongS.
New Note Apparent.
Similarly, the apparent belief that
this bill will be passed has brought
about an entirely new note in market
letters and the general run OF Wall
Street publicity. Here Is heading,
typical of the change:
This market letter Is an express
sion of our views and opinions with
respect to the securities and (or COM
modities markets and) or the partic-
ular securities mentioned below. 1t is
not intended to be considered as an
offer to sell or buy, or solicitation
of an offer to sell or buy any security
or any commodity"
The letter is a cautious recital OF
certain entirely objective happenings
In the market, quite unlike anything
of the kind this writer ever has seen.
Under the bill, If rumor should
get around that they" were up to
something or other in such-and-such
a stock, and if this rumor should be
traced to any particular person, this
person, whether broker or just an
innocent bystander, would be subject
to prosecution.
Concurrently, swarthy, little shock
headed Ferdinand Pecora keeps on
rowelling the pools in the Senate
Banking Committee inquiry. 1t all
narrows down mostly to dealers gang
ing up to boost prices, rather than
lower them, as, in the stock market,
only the bulls are gregarious animals.
The bears hunt alone. And, Of
course, they" is a herd word, and
the pack just couldn't work without
it. So it appears that just amputat-
ing one word from the Wall Street
vocabulary may accomplish more
than putting ten million words in the
Congressional Record.
Copyright, 1934)