Evening star., 1934-03-09
MODIFIED STOCK
BILL DUE MONDAY
Margins of 40 Per Cent
Proposed-WaII Street
Traders GIeefuI.
BY the Associated Press.


The Senate Banking Committee to-
day recessed its hearings on stock
market regulation until Monday. with
word that new draft of the
Fletcher -Rayburn bill would be
ready at that time.
Ferdinand Pecora. committee coun-
sci, who is drafting the bill for
Chairman Fletcher, said 1T will be
found to meet the objections and
criticisms that seem to have merit
that have been voiced"
While Peccra would not disclose
details of the new bill it was learned
that vital changes regarding mar
ginal requirements and broker ac-
tivities have been tentatively adopted.
Meanwhile, Chairman Rayburn said
hearings on the stock exchange regu-
lation bill would be concluded by the
House Interstate Commerce Commit
tee wednesday or Thursday and .
study looking to revision Of the meas
ure would be undertaken in executive
session.
Sponsors to Be Heard.
The committee decided today 1t
would not hear additional opponents
to the legislation. out would call ad-
ministration officials who favor regu-
lation.
Rayburn said the committee wanted
to obtain information from the Treas
ury and the Federal Reserve Board as
to what effect the projected legislation
would have on banking institutions.
It was understood the relaxations
would
l. Permit brokers to carry custom
ers until their margins dropped to 40
per cent.
2. Modify the drastic segregation
clause of the original draft to permit
members Of exchanges to trade for
their own account and act as brokers
on cash basis.
Both notifications represented big
concessions from the original drafts.
Stocks rallied briskly yesterday after
reports of the proposed modification.
60 Per Cent Cash Required.
Under the new margin proposal, .
buyer would have to put up go per
cent cash in purchasing security,
but the broker would not be compelled
to call him for further money until
the stock had dropped to the point
where the cash represented only 20
per cent Of the market value.
The second alteration would per-
NIT exchange members who did not
extend margins to customers to trade
in their own behalf. It was designed
to meet the objections Of broker deal.
ers in cities outside of New York who
contended the complete prohibition
would throw them out of business.
With these and other notifications,
Chairman Fletcher Of the Senate
Banking Committee expects the re-
drafted bill to be completed early
next week. Fletcher called the COM
mittee together today to continue
hearings on the bill, but was not GER
tain any more witnesses would appear.
Eugene Black, governor of the Fed
eral Reserve Board, told the commit
tee he did not want to appear until
he had completed drafting q report
on the bill the committee had pre-
viously asked him to submit.
Hint From White House.
Revision Of the bill was undertaken
after q hint from the White House
yesterday that it should be confined
to well recognized evils of the ex-
change"
Even before Senator Robinson. the
Democratic leader, had emerged from
the executive Offices with this advice.
the new draft was virtually completed
by experts working under the direc-
ton Of Chairman Fletcher.
Meanwhile, Secretary Morgenthau
called special Treasury press confer
ence to deny published reports he op-
posed the regulatory legislation. He
said he had never read it." taken mo
part in it, and had mo opinion of 1t
one Way or another"