Evening star., 1934-03-22
RISE OF PRODUCE
EXCHANGE TOLD
Ranks Fourth in Volume,
President Knighton
Reveals Here.
BY EDWARD C. STONE.


New York Produce Exchange, brought
out a host of little known facts about
that interesting organization in his
testimony on the proposed measure
before Congress to regulate all stock
exchanges. The Produce Exchange
maintains a securities market which
has come to be the fourth largest in
volume of shares in the United States
he said.
The Produce Exchange is only six
years old, he told the Congressional
Committee, having been organized in
1928, the board of managers believing
there was need for third security
market in New York City. Regarding
the functions CT such markets, Mr..
Knighton added:
The function of every properly
conducted exchange is to afford
market in which buyers and sellers
will obtain as nearly the true none
tary value of a security as is practi-
cal. There is a vast difference be-
tween public or regulated markets and
private markets. An exchange mar
ket in which representatives Of buy
ers and sellers meet on a single floor.
more closely reflects the public de-
mand for securities and their true
value than any system of private
buying and selling such as commonly
exists in outside trading.
and seller have 70 means of knowing
whether the price paid and obtained
reflects actual conditions, as regards
supply and demand for any particu
lar security, or Tor securities il gen.
eral; whereas a properly conducted
market, in which number of buyers
and sellers meet, and in which every
actual or even potential buyer or
seller is afforded public quotations Of
what other actual or potential buyers
and sellers pay or are willing 20 pay
or accept gives assurance that values
are more truly reflected"
Defends Unlisted Securities.
Mr.. Knighton stated that his ex-
change subscribed to the same OBJ
jections to the national securities act
of 1884 as had been presented by the
New York Stock Exchange and the
New York Curb Exchange.
So-called listed securities" form a
relatively small proportion of the
total volume of corporate securities
issued in this country. The Produce
Exchange maintains a market princi-
paly on issues which are admitted to
trading privileges upon application of
some one other than the issuing cor
poration, the witness said. The holders
OF such securities are accordingly af-
forded an organized market which has
the advantage OF full publicity and
supervision CT trading
The committee should have In
mind that dealing in unlisted secur-
tiles, traded in on exchanges and else
where, represents the trading in over
two-thirds Of all security issues" The
Official concluded, the proposed law
would deprive this enormous volume of
unlisted securities of an organized
market place. Over 100000 shares
were traded on the New York Produce
Exchange alone last year.
Franklin Stock Sale Pushed
1t was reported today that 80 per
cent of the 100000 new stock to be
sold by the Franklin National Bank,
before it can be reopened. has now
been disposed Of.
Upon sale of the remaining $40
600 in stock, the Franklin will be in
a position to operate again on a 100
per cent basis as a unit OF the Wash
ington Mechanics Savings Bank to
be known in the future as the City
Bank Of Washington.
The sale of the stock has progressed
with particular rapidity during the
past three days, bringing the re-
opening and consolidation date con-
slderably closer.
Joseph H. Hines and E. ]. Murphy
have been elected directors in the
Acacia Mutual Life Insurance Co.
Mr.. Hines has large financial in
terests in Washington and is presi-
dent of the company which operates
the Transportation Building He is
former Representative in Congress
from Ohio.
Mr., Murphy is a past president of
the Washington Board of Trade. ard
is head of E. j. Murphy & Co, Inc.
He has been active in civic affairs in
the Capital for years.