Evening star., 1941-10-30
Creeping Paralysis
Hits Stock Exchanges,
Schram Declares
House Committee Told
Legislation Of 1894
Now Needs Revision

BY the Associated Press.
Emil Schram New York Stock
Exchange president, urged Congress
today to help maintain honest and
efficient security exchanges, and
warned that creeping paralysis
was afflicting those markets.
Testifying before the House Inter
state Commerce Committee. Mr..
Schram said that proposed amend
ments by the securities industry to
basic securities laws were sponsored
In the belief that they would help
the markets continue operation
honestly, soundly and efficiently in
the public interest.
The former chairman of the Recon-
struction Finance Corp. asserted:
We are gravely concerned over
the future Of our exchange markets.
Unless the trend in our business is
reversed they cannot survive in
definitely as the efficient organiza-
tions which they are today.
Problem Different From 1884.
an 1884 your problem was to
stamp out certain evils which had
developed in our exchange markets
and to prevent the absorption OF
too large portion OF our national
credit. The situation which had
existed has been corrected. Today
your problem, as I see it, is one of
preserving our honest and efficient
exchange markets and OF encourag-
ing their operations on a sound
basis, in the public interest. I am
confident that, with the helpful CO.
operation OF Congress and of the
Securities and Exchange Commits
sion, our exchange markets can
survive and attract the capital
necessary for their operation"
Mr.. Schram asked Congress to
recognize that the exchanges are
a vital factor In our economy"
George P. Rea, president of the
New York Curb Exchange, said the
industry was sponsoring the amend
ments so that private financing
may be given fair chance to
show what it may accomplish"
Normal Business Held Impossible.
Saying that speculative abuses
which gave rise to the laws had
not recurred, Mr.. Rea told the
committee:
The industry feels strongly and
sincerely that the acts have gone
so far as to make normal conduct
of its business impossible"
Basic Changes Opposed.
Frayser Jones, chairman of the
National Association of Manufac-
turers Associations Committee on
Industrial Financing, told the COM
mittee that now was not the time
to seek basic amendments to the law.
Mr.. Jones said: The proposed
amendments, If enacted, would re-
suit in added responsibilities and in
creased liabilities to all business,
both large and small. These would
be particularly burdensome to small
business. 1t is only sound policy
that the less disturbance there is to
the existing processes of financing
the better.
The nature Of some of these pro-
posed changes appears to the asso-
citation to be such as to impede
rather than to facilitate the iow
Of capital. Further restrictions
placed upon the flow of capital
would necessarily hamper the de-
velopment of free enterprise under
any conditions This might pos
sibly lead to increased governmental
control and regulation over the
entire private enterprise system.
The request came from Emmett r.
Connely, president of the Invest
ment Bankers Association.
1T is to smooth out the flaws
while still retaining the protection
for the investor and permitting
honest business to operate freely
that We seek amendent of the acts"
Mr.. Connely said He said these
acts have undergone no general re-
view since 1884.