Evening star., 1934-05-13
STOCK BILL MUST
co TO CONFERENCE
Measure, Passed by Senate,
;. Places Market Under
Federal Control.
SContinued From First Page.)

exchanges and listed stocks with the
regulating commission.
Power for the commission to re-
quire regular reports of the financial
and trade conditions of all corpora
tions with listed stocks, and power
to specify the form in which such re-
ports shall be made.
A study by the commission Of the
advisability of prohibiting floor trad
ing by members of exchanges and OF
the desirability of completely divorc-
ing the functions of broker, dealer
and specialist
Authority for the commission. with
the approval of the President, to close
exchanges for 90-day periods.
Authority for the commission to
require that the orders on specialists
books be made public information.
A ban on 'manipulative" and de
ceptive" devices, such as pools and
other activities intended to create
artificial prices.
Power for the commission to make
rules and regulations for short SELL
ing and options, or to prohibit them
entirely.
Burden of Proof Shifted.
The notifications to the securities
act of last year, would:
: Shift the burden of proof Of good
faith from the defendant to the plain
tiff in all actions to recover damages
under the provisions for liability for
misleading statements.
e, Restrict the extent of recoverable
damages to actual losses suffered, in
stead of the present maximum of the
difference between the price paid and
the subsequent lowest price of the Sc
curity in question.
Require proof by the plaintiff that
he bought the security on which he
suffered the loss in reliance upon the
alleged misleading statement and that
the loss Resulted from the latter.
Limit the liability of underwriters
to the total price at which an issue
was offered to the public.
81 Empower the courts to require the
posting of bond for costs and provide
the courts with authority to assess
either side for the costs of the case of
the other
Exempt officers, directors and others
from responsibility for erroneous
statements made by experts, if chosen
with reasonable care, and with rea-
sonable ground to believe the ex-
pert qualified for the responsibility
given him.
Shift Administration.
CbanCa tho cfopdor5 - s,o.oo.Ll.
ness. a word that runs through the
act, from that of one acting in fidu-
:ciary capacity to that of prudent
man in the management of his own
property"
Exempt controlling persons" from
responsibility and liability for acts of
the person controlled, unless it is
proved that the act on which a claim
for damages is based, was performed
at the direction of the controlling per-
son.
Shift administration of the securi-
.ties act from the Trade Commission to
the Special Stock Exchange Commits
sion.
Big business for months has con-
tended the several penalties of the
into inactivity and was preventing the
expansion on which recovery should
be based.
= Not only did the law prevent the
Notation OF worthless securities. it
was contended but it had kept honest.
sound stocks and bonds off the mar
ket because of the fear of their spon-
sors that they might innocently vio-
late some one or more Of the acts
many prohibitions.
Debate on the stock exchange bill
was marked throughout by Republi-
can conservative contention that the
measure placed the regulating COM
mission in control of the internal
direction OF private corporations, as
the result of its power to require re-
ports and specify their form.
Many Charges Hurled.
Friends Of the measure replied with
an emphatic denial and charge that
this contention had been raised by
the New York Stock Exchange and
New York investment bankers as a
bugaboo intended to frighten little
business into pulling their chestnuts
out of the fire."
Charges of "unexampled propagan-
da" and most powerful lobby" in
years ran through the discussion on
the floor of both houses as they did
through the preliminary committee
consideration.
Friends of the bill asserted the
Stock Exchange, brokers and large
corporations had circularized their
employees and stockholders with need
1eSsly alarming statements urging
them to oppose the measure by
writing to their Representatives in
Congress.
Not until near the close of debate
in the Senate was the constitution
ality of the measure challenged. Then
Borah of Idaho, who had voted
against all amendments intended to
weaken the bill and for all those
framed to strengthen it, objected that
the measure conferred an invalid tax
ing power upon the commission.