Evening star., 1934-03-20
REWRITING STOCK
BILL MENDS RIFT.
Split Between Treasury,
Reserve Board and
Congress Ends.
BY the Associat ted Press.

BY the Associate ted Press
Differences between congressional
advocates of stock market control
legislation and the Treasury and Fed
eral Reserve Board were reported
officially today to have been composed
bv the revised measure introduced
yesterday.
This was made known by Chairman
Rayburn as the House Interstate
Commerce Committee opened hear
tngs on the new bill. His statement
was echoed by Thomas Corcoran,
counsel Of the Reconstruction Finance
Corporation, and one of the dratterS
of the measure.
Corcoran added that the revised
draft hberalizing margin requirements
represented eight days and nights Of
work by the authors of the measure
and the Federal Reserve and Treasury
staffs, including members Of the stall
of Ferdinand Pecora, Senate Banking
Committee counsel.
Pecora Explains Bill.
Rayburn told Stock Exchange repre-
sentatives that in the new draft of
this bill we have tried to meet all
legitimate criticisms" raised during
the hearings on the original bill.
Meanwhile. Pecora explained the
bill to the Senate Banking Committee
in executive session.
Chairman Fletcher described the
revised measure as "a very decided i'm
provement.
1T meets the objections largely that
have been urged against the bill, -
Fletcher said.
Pecora indicated he was satisfied
with the bill. but felt it could not be
modified further without failing Of its
objective.
Il think it's a bill with teeth Pc
cora said as he hurried into the COM
mittee meeting.
Changes in Revising Bill.
Principal changes made in revising
the bill follow:
Original bill-Loan value of a stock
limited to 40 per cent of market value
$50 per cent cash margin, or 80 per
cent of lowest price in three years.
Revised bill-Alternative provision
made 100 per cent of lowest price in
three years.
Original bill-Administration of act
vested in Federal Trade Commission.
Revised bill-The same. but pro-
vision made for increasing commits
sionS membership from five to seven.
Enforcement of margin requirements
given 10 Federal Reserve Board.
Original bill-Margin requirements
applicable October l. 1884, on all out
standing brokers accounts and bank
loans on securities.
Revised bill-Margin requirements
not applicable to present accounts
until January l. 1889. but applicable
to all transactions made after October
!, 1884.
Original bill-InCluded banks max
Ing loans on securities under defini-
ton of broker
Revised bill-Excluded banks from
such classification.
Liability Is Limited
Original bill-Made any one circu-
lating misleading information on Sc
curities liable to punishment
Revised bill-Confnes liability to
brokers' dealers and persons offering
securities for sale.
Original bill-In suits for recovery
because of misleading statements,
burden of proof as to exercise of due
care placed with defendant.
Revised bill-Puts such burden of
proof on plaintiff with defendant re-
quired to show only good faith
Original bill-Made civil liability
for misstatement difference between
price at which victim bought or sold
and lowest or highest price security
In question reached in three months.
Revised bill-Limited liability to
actual loss of plaintiff.
Original bill-Required that brok-
ers could not act as dealers and that
specialists could not trade for own &C
count or accept market orders.
Revised bill-Permits brokers to be
odd-lot dealers: lets specialist be
either broker or dealer exclusively;
permits acceptance of market orders,
but bans discretionary orders.
Options Permitted.
Original bill-Outlawed giving or
receiving options.
Revised bill-Permits options under
regulations of Trade Commission.
Original bill-Banned dealing on
exchanges in unlisted securities.
Revised bill-PermitS such trans
actions in securities already so
traded in until March l, 1885.
Original bill-Called for frequent
financial statements from corpora
tions with listed securities, all inde-
pendently audited.
Revised bill = Gives commission
power to vary these requirements
where deemed inapplicable; only an
nual reports subject to independent
audit
Original bill-All such reports to be
made to commission.
Revised bill-InStitution or COM
panies subject to jurisdiction of Fed
eral Reserve Board. controller of cur
rency or Interstate Commerce Com
mission make their reports to those
agencies.
Original bill-Made it unlawful for
any director. officer or principal stock
holder to divulge confidential infor-
nation on the companies financial
condition.
Revised bill-This section ellmln-
ated.
Suspensory Power Removed.
Original bill-Empowered commits
sion to suspend trading on any eX-
change for a period of emergency.
Revised bill-Commission cannot
suspend trading without approval OF
the President.
Original bill-Gave commission au-
thority to make such rules as 1t
deemed necessary for enforcement OF
the act and to impose rules on eX-
changes.
Revised bill-Limits imposition of
rules to exchanges which have tailed
to adopt satisfactory rules.
Original bill-Full trade commits
sion in charge of administration OF