Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-05-22
EXCHANGE BOWS
TO RULEBY s. f. c.
Harmony Dinner Is Laid
Around Theme-ControI
Is Here to Stay.
BY the Associated Press,

By the Associated Press.
> NEW YORK. May 21.-Back in tn.
gay ord days" of 1928 and 1929
Wall Street was hailing new era
The greatest speculative wave in thu
history of the world was reaching it.
crest and, with a devastating sud
denness, it toppled on a shore strewr
with wreckage.
Today, another new era has come
to Wall Street.
1t is the new era Of cooperation
. and harmony between the New Dea
and the New York Stock Exchange
the keystone of the financial structure
of the Nation for more than hundred
years.
Representative of regulation instead
of unbridled speculation, this new era
was symbolized at last nights "har-
mony banquet celebrating the re.
organization of the stock exchange
The printed announcement said il
vas testimonial to those who pre-
rared the plan of reorganization. But
f'gnificantly, the speaker of the eve
ring was William O. Douglas, chair
man of the Securities and Exchange
Commission.
Cop on the Beat.
Stripped of all its words, the theme
Of the evening plainly was this: Wall
street acknowledged that regulation
by Washington is an accomplished
fact and is here to stay, so it is bet
ter to work together in harmony than
n continue down the old road OF Bit
terness and opposition.
In other words, to use the vernacu-
lar. Uncle Sam is the cop on the beat
and it's better to clap hand to his
shoulder than to thumb your nose at
him.
Perhaps. this was the thought In
Mr.. Douglas mind, in saying these
closing words of his address:
SO as the green light flashes, bid
you safe riding down the broad and
open road that lies ahead. l do more
than that offer you police es-
Cort."
AS Mr. Douglas put it, the new era
Is something else besides mere Govern
ment regulation and supervision
something more than cooperation
Briefly stated. it is this: The ex-
changes will police themselves under
, laws laid down by Uncle Sam. But
rs Mr.. Douglas said. Uncle Sam would
keep his night-stick behind his back,
but ready for use if needed. :
Address Is Conciliatory.
The S. E. c. chairman's address was
widely regarded in the financial COM
rlunitv as conciliatory in tone: and
it could afford to be so. For the S,
f. c., in a controversy extending over
almost five full years, has emerged
victorious.
The stock exchange Of today is no
.ionger the private club Of yesterday.
It is public institution and this. per-
haps. is the paramount point in the
reorganization completed last week,
The program of reorganization was
laid out before the collapse of Rich
ard Whitney's brokerage firm; but
there is little doubt in the mind of
Wall Street that this collapse helped
to bring the overwhelming approval
with which the reorganization was put
into effect.
Whitney. who typihed the old regime
for five years as president OF the ex-
change. was the focal point of oppo-
sition in the Washington investiga-
tons that preceded enactment of the
Securities Exchange Act of l934-the
New Deals entrance in the regulation
and control of the Nations stock
markets.
Opposition Is Developing.
But even then. opposition was de-
veloping in the exchange itself to the
"Old Guard" represented by Whitney.
The large commission houses, with
branches over all the country. started
the reform movement, sought to effect
cooperation with the S. E. c.. and
recognized Washington's role of reg
ulator.
The election of Charles r. Gay, in
1885, as president of the exchange
" dS ltCoSlIllloIl W SUlIlt Shttllt VI
the reformist movement, but the COM
rlete reformation of the exchange as
desired by the S. E. G. did not get
under way in earnest until last year
and the job is now finished.
The old self-perpetuating Board of
Governors-Who looked upon the eX-
change as gentleman's clubs gone.
The new board is dominated by those
who favor cooperation with the New
Deal, and it has representatives of
the general public. The paid presi-
dent, who will be the chief admins
trative officer as desired by the S. E.
c., will be elected shortly.
The S. E. c. is on top. The "har-
mony banquet was recognition of this
and it was also pledge of co-opera-
ton, made both by the S. E. c. and
those who now control the stock
exchange.
Some" Mr.. Douglas said, will
always look with longing backward
glances at the gay days of 1929. But
you and we know that as a Nation
we cannot and should not turn back"