El Paso Morning Times (El Paso, Tex.), Vol. 29, Ed. 1 Thursday, June 17, 1909 Page: 3 of 14
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EL PASO MORNING TIMES, THURSDAY. JUNE 17, 1909.
COMMISSION
REPORTS ON
EXCHANGES
Says Charters of Mercan-
tile and Metal Exchanges
Should Be Repealed.
EXHAUSTIVE REPORT
IS MADE TO HUGHES
Board Reviews Conditions
and Discusses Evil of
Speculation.
New York, June 16.—The report ol
the committee appointed by Governor
Hughes to investigate speculation in
securities and commodities and the
organization used in dealings therein
was made public tonight. The New
York Stock, the Consolidated Stock,
the Cotton, the Produce, the Coffee,
the Mercantile, and the Metal exs-
change and the curb market were
thoroughly investigated and recom-
mendations looking to improvement of
existing conditions were made at
length by the committee. The most
drastic finding Is that affecting the
Mercantile and Metal exchanges, as
follows: "Under present conditions,
we are of the opinion that the Mer-
cantile and Metal exchanges do actual
harm to producers and consumers,
and that their charters should be re-
pealed.”
Speculation Necessary.
Concerning speculation in general,
the committee declares that it may be
wholly legitimate, pure gambling, or
something partaking of the qualities ol
both, that in some form it is a neces-
sary incident of productive operations:
that it tends to steady prices and that
for the merchant or manufcturer the
speculator performs a service which
has the effect of insurance. “In law,”
says the report, “speculation becomes
gambling when the trading which it
involves does not lead, and is not in-
tended to lead, to the actual passing
from hand to hand of the property
that is dealt In.
“The rules of all the exchanges for-
bid gambling as defined by this opin-
ion; but they make so easy a techni-
cal delivery of the property contract-
ed for, that the practical effect of
much speculation, in point of form
legitimate, is not greatly different
from that of gambling.”
Short Sailing Steadies Prices.
The committee makes no present-
ment against short selling but de-
clares the tendency of such selling is
to steady prices. It is recommended
that the minimum margin should be
20 jwr cent and strong disapproval is
expressed of branch brokerage offices
which supply liquor and resort to oth-
er improper means to induce specula-
tion.
The New York Stock Exchange.
Taking up the New York Stock ex-
change, the volume of transactions
thereon is referred to as making it
probably the most inportant financial
institution in the world, its “enormous
business affecting the financial and
credit interests of the country in so
large a measure that its proper regula-
tion is a matter of transcendent im-
portance.” Patrons of the exchange
are divided by the mommittee into five
groups,. namely, investors who pay
for what they Why; manipulators of
prices; floor traders; outside opera-
tors haying capital and experience
and "inexperienced persons who acl
on interested advice, ‘tips’, advertise-
ments in newspapers, or circulars seiff
by mail, or ‘take flyers’ in absolute
ignorance and with blind confidence
in their luck. Alomst without excep-
tion they eventually lose.” As to the
character of the transactions the com-
mittee declares it Is unquestionable
that only a small part of them is of
Investment character; a “substantial
part may be characterized as virtually
gambling. Yet we are unable to see
how the state could distinguish by law
between proper and improper trans-
actions, since the forms and mechan-
isms used are identical. Rigid statutes
directed against the latter would serl-
ouly Interfere with the former. The
experience of Germany with similar
legislation is illuminating. But the
exchange, with the plenary power
over members and their operations,
could provide correctives, as we shall
show.
Margin Buying Legitimate.
“Purchasing securities margin is as
legitimate a transaction aa a purchase
of any other property In which part
payment Is deferred. We therefore
see no reason whatsoever for recom-
mending the radical change suggest-
ed, that margin trading be prohib-
ited.” ' „ ,
Discourage Pyramiding.
Pyramiding, that Is the use of paper
profits as margin for further commit-
ments should be discourgaed, says the
committee.
“We have been strongly urged to
advise the prohibition or limitation
of short sales” says the report, “not
only on the theory that It Is wrong
to agree to sell what one dope not
possess, but that such sates reduce
the market price of the securities In-
volved. We do not think that It Is
wrong to agree to sell something that
one does not now possess, but expects
to obtain later. Short-nellers endeavor
to select times when prices seem
high in order to sell, and times when
prices seegt low In order to buy, their
action in both cases serving to lessen
advances and diminish declines of
price. In other words, short-selling
tends to produce steadiness in prices,
which is an advantage to the com-
munity. No other means of restrain-
ing unwarranted marking up and down
of prices has been suggested to ua.”
Manipulation is of Two Claasea.
Manipulation of prices Is divided by
the committee into two clauses: first,
that which ts resorted to for the pur-
pose of making a market for issues
pf new securities, and second that
which la designed to servi
speculative purposes in the endeavor
to make a profit aa the result of
fluctuations which have been planned
in advance.
“The second kind of manipulation
mentioned is undoubtedly open to seri-
ous criticism. It has for its object
either the creation of high prices for
particular stocks, in order to draw la
the public as buyers and to
upon them the holdings of the
operators, or to depress the prices
and Induce the public to sell. There
have been instances of gross and un-
justifiable manipulation of securities,
as In the case of American Ice stock.
While we have been unable to dis-
cover any complete remedy short of
abolishing the stock exchange Itself,
we are convinced that the exchange
can prevent the worst forms of this
evil by exercising its influence and
authority over the members to present
them. When continued manipulation
exists it is patent'to experienced ob-
servers.”
Cemsra Interesting.
“The Subject of comers in the
stock market has engaged our atten-
tion. The stock exchange might
properly adopt a rule providing that
the governors shall have power to
decide when a corner exists and to
fix a settlement price, so as to relieve
Innocent persons from the injury or
ruin which may result therefrom. The
mere existence of such a rule would
tend to present corners.”
The board of governors of the
stock exchange should Improve pres-
ent conditions with regard to failures
of brokers, according to the commit-
tee. It Is suggested that the books
of members of the exchange should
be subject to periodic examination
under rules to be prescribed by the
exchange. It Is declared further that
when a broker sells a customer’s
securities for his own benefit, he
should be held guilty of larceny and
a statute to that effect Is recommend-
ed.
The committee does not favor the
Incorporation of the stock exchange
holding that "under existing condi-
tions, being a voluntary organization,
It has almost unlimited power over
the conduct of its members, and it
can subject them to instant discipline
for wrong doing, which it could not
exercise in a summary manner if It
were an incorporated body.
-Investigation shows that on one
active day 52 per cent of the total
transactions apparently originated In
New York City and 48 per cent in
other localities.
The Consolidated Stock Exchange.
The committee describee the con-
solidated exchange as a “secondary
market of no mean proportions,” Its
sales averaging about 45,000,000
shares per annum. Of this exchange
the committee says;
“The fact that its members make a
specialty of ‘broken lots,’ namely
transactions In shares less than the
100 unit, is used as ground for the
claim that It Is a servlcable Institu-
tion for investors, of relatively small
means. But It is obvious that Its
utility as a provider of capital for en-
terprises is exceedingly limited; and
that It affords facilities for the moet
Injurious form of speculation—that
which attracts persons of small
mean*.”
Cognate Subjects.
Under the heading ‘‘Cognate Sub-
jects” the committee discusses hold-
ing companies, receiverships, the
money market and the usury law. It
suggests that stockholders of a sub-
sidiary company should have the right
to examine the books of the holding
company; that the courts might place
a Bhort time limitation on receiver-
ships; that the questions concerning
the money market, which are under
investigation by the federal authori-
ties could not be adjusted either
through exchange regulation or state
legislation, and that the New York
law which permits call loans o£ $5,000
or more, secured by collateral, to be
made* at rates higher than 6 per cent
should be permitted to stand as its
repeal would not be beneficial.
The Curb Market.
The unorganized status of the curb
market, especially with reference to
mining shares is discussed by the com-
mittee, as follows:
“Bitter complaints have reached us
of frauds perpetrated upon confiding
persons, who have been induced to
purchase mining shares because they
are quoted on the curb; these are fre-
quently advertised in newspapers and
circulars sent through the mails as
so quoted.
“Notwithstanding the lack of proper
supervision and control over the ad-
mission of securities to the privilege
of quotation, some of them are
meritorious, and in this particular the
curb performs a useful function. The
existence of the cited abuses does not,
in our judgment, demand the abolition
of the curb market. Regulation is.
however, imperative. About 85 per
cent of the business of the curb comes
through the offices of members of the
New York exchange, but a provision
of the constitution of that exchange
prohibits its members from becoming
members of, or dealing on, any other
organized stock exchange in New
York. Accordingly, operators on the
curb market have not attempted to
form an organization. The attiiude
of the stock exchange is therefore
largely responsible for the existence
Of such abuses as result from the
want of organization of the curb
market
“The stock exchange should com-
pel the formation and enforcement of
such rules as may seem proper for
the regulation of business on the
curb, the ' conduct of those dealing
thereon, and, particularly, for the ad-
mission of aecuritles to quotation.”
The abuse of advertising is gone
into at some length, the committee
declaring that much of the discredit
in the public mind attaching to Wall
street Is due to frauds perpetrated
by nteans of alluring advertisements.
The Commodity Exchanges.
In its report on the exchanges that
deal In agricultural products the com-
mittee quotes the report of the Indus-
trial commission of congress in 1901
showing that selling for future deliv-
ery. based upon a forecast of future
conditions of supply and demand, is
an lndispensible part of the world's
commercial machinery, by which
prices are as far as possible, equalis-
ed throughout the year to the advan-
tage of both producer and consumer.
The Produce Exchange.
The committee disapproves transac-
tions in mining shares on the produce
exchange In the following language:
"From our examination of the trad-
ing in mining stocks recently intro-
duced, w^ conclude that the lack of
Unrivalled Bargains
In Women’s Dresses and Skirts
We are going to make it worth while for you to buy here today. The prices we note be-
low ought to interest every prudent and economical shopper. Be on hand early and get first
choice of these bargains.
Four Extra Specials
Today we place on sale the greatest val-
ues ever offered you in one-piece dresses and
jumper effects. They arcvlhe latest models,
well made and beautifully trimmed, in all the
season’s newest shades; also stripes, checks
and polka dots. On sale today at the fol-
lowing reduced prices:
$1.50 Jumper Dresses for ...........................89c
$2.25 Jumper Dresses for................ ........$1.48
$4.50 Jumper Dresees and Lingerie Dresses for........$2.98
$7.50 Jumper Dresses and Lingerie Dresses for.......$4.98
$8.50 SKIRTS FOR $4.98.
Nearly 200 of them—a new shipment just received. Made of
fine voile, panama, white serges, Cecillan and light weight
mixtures, In any color you want arttTany style you can think
of. $8.50 values on sale today at $4.98.
50c Wash Goods 18c
27-lneh fancy wash fabrics, such as voiles, tissues ami
mulls, in figures, stripes, checks, plaids and floral ef-
fects, 50c values, for today's selling,
extra special at...........'..............
18c
Long Kimonos $2.39
Lawn and crcpc Kimonas, in figured and ori-
ental designs, some white with black dots,
checks, etc., values up to $3.75, special, $2.39.
Be Fitted in a Gossard Lace-Front Cor-
set Before Leaving for Your Summer
Vacation.
CHILDREN’S DRESSES.
Dresses for the little folks of just such ma-
terial as you would select, made in just the
way you would make them, hut for about
one-half the price you could do it for. Visit
this department and see the selection.
Two Extra Specials
27-Inch Flaxtm in neat pin stripes, checks, fig
mi's, very sheer and dainty, 25c value, special..
ati-inch sheer white Linen, for dresses and
waists, 40c value, siiecial....................
16c
28c
Extra Specials
35c VESTS, 19c.
Women’s Lisle Vests, silk and linen taped,
in white, black, pink and baby blue, 35c values,
special 19c.
35c HOSE, 18c.
Women’s Lisle Hose, lace boot effect, in black
only, 35c values, special 18c.
12 l-2c TORCHON LACE FOR 3 l-2c:
Torchon Laces, machine made, widtli one to
three inches, edgings and bands, odd and matched
pieces, 12 l-2c values, special, 3 l-2c.
30 per Cent
Discount on our entire stock of colored em-
broideries, consisting of all-overs, edgings and
bands in matched sets. Prices range from 15c to
$4.50, offered now at 30 per cent discount.
KAYSER’S GLOVES FOR 63c.
Kayser’s No. 2 all silk Gloves, with double tip-
ped fingers, wrist length, in black, white and col-
ors, are especially priced at 63c.
EXTRA SPECIAL-35c STOCKS FOR 16c
50 dozen stock collars, made of baby Irish
lace and lawn, finished with Val. lace, 35c
values are special at 16c.
$1.50 BELTS FOR 78c.
Silk and Elastic Belts, in any desired widtli
or color, the newest creations in buckles, values
up to $1.50, special, 78c.
Our June Sale Begins
Monday, June 21st
Deliveries Are Made
Daily
to East El Paso, Highland Park, Kt.
Bliss and Smelter.
Men’s
Clothing
Reduced Prices
Hart Schaffner A Marx and B. KrUppenheimer’s high
grade suits in fancy mixtures—all new spring and
summer stock. Both three-piece styles and two-plecc
coat and trousers suits.. Perfect in every detail, the
coats have broad shoulders, with graceful lapels.
Come in stouts, slims and regulars. Reduced as fol-
lows:
Suits that you can's duplicate anywhere at $32.50,
FOR $25.85.
Suits that von can't duplicate anywhere at. $30.00.
FOR $24.35.
Suits that you can’t, duplicate anywhere for $27.50,
FOR $22.45.
Suits (hat you can't duplicate anywhere for $25 00,
FOR $19.50.
Suits that you can't duplicate anywhere for $22.50,
FOR $17.85.
Suits lhat you can't duplicate anywhere for $20.00,
FOR $16.25.
Suits that you can't duplicate anywhere lor $13.no,
FOR $14.15.
Suits that you can’t duplicate anywhere for $10.50,
FOR $12.65.
Suits that, you can't duplicate anywhei'e for $15.00,
FOR $11.85.
Suits that you can't duplicate anywhere for $12.50,
FOR $9.50.
Suits that you can't duplicate anywhere for $10 50,
FOR $8.35.
Boys* ^Section
$3.00 WASH SUITS FOR $1.98.
Wash Suits, in sailor blouse and Buster
Brown styles, for hoys from 2 to TO years, in
linen, chambray, percales and galatcas in solid
colors, fancy stripes, and checks values up to
$3.00, special, $1.^)8.
$1.00 KNICKERBOCKER TROUSERS, 55cj
Wool trousers, knickerbockers only, assorted
colors, worth $1.00, special, 55c.
Basement Specials
THURSDAY AND FRIDAY
BARGAIN DAY FOR THE CHILDREN.
CHILDREN’S AND MISSES’ WASH
DRESSES.
Made of good quality percales and ginghams,
in sizes from 2 to 14 years, worth regularly 75c;
special, 47c each.
CHILDREN’S ROMPERS.
hi styles suitable for hoys and girls between
the ages of 1 and 7 years. Made of seasonable
weight ginghams, percale and sateen. Special
Thursday and Friday, 47c each.
CHILDREN’S ROMPERS.
Made of excellent quality natural color linen
tastefully trimmed in white, regular $1.00 values,
special, 79c.
BOYS’ SHOES.
Broken lines of Boys’ Shoes, ranging from
$2.00 to $2.50 in value. Extra special in the base-
ment Thursday and Friday, $1.28 pair.
Our June Sale Begins
Monday, June 21st
DRY GOODS CO.'wc
Meet Me at the Popular
Fountain
the only place in the city where you
can buy ice cream soda, all flavors,
for 5c a glass.
experience of this body in this class
of business has resulted in a neglect
of proper safeguards to the investor
and an undue incitement to speculative
transactions of a gambling nature,
and should not be tolerated on the
produce exchange.”
The Cetton Exchange.
Tbe New York Cotton exchange is
described as the "world’s clearing
house for the staple.” Selling for fu-
ture delivery is declared to be neces-
sary to the harmonious and unlntei-
rupted movement of tbe staple from
producer to consumer.
The Coffee Exchange.
The rule of the Coffee exchange
providing that in case of a corner the
officials may fix a settlement price
is commended by the committee.
The Other Exchanges.
The exchanges dealing with fruit
and hay are not concerned with specu-
lation. Tbe committee, however, dis-
approves the practices on the mer-
cantile exchange and the metal ex-
change on the ground that their quota-
tions are not a record of actual trans-
actions. On tbe mercantile, says tbe
report, there are some “desultory oper-
ations in to-called future contracts
in butter and eggs.'' but the published
quotations are made by a committee.
"That committee,'' the report con-
tinues, "is actually a close corporation
of the buyers of butter and eggs, and
the prices really represent their views
as to the rates at which the trade
general}- should be ready to buy from
the farmers and country dealers.
"Similar, but equally deceptive, is
the method of quotations on the metal
exchange. In spite of tbe apparent
activity of dealings in thlB organiza-
tion in published market reports, there
are no actual sales on the floor of
the metal exchange, and we are as-
sured that there have been none for
several years. Prices are, bowevei,
manipulated up and down by a quota-
tion committee of three, chosen an-
nually, who represent the great metal
helling agencies as their interest may.
appear, affording facilities for fixing
prices on large contracts, mainly for
the profit of a small clique, embrac-
ing, however, some of the largest in-
terests in the metal trade.
"These practices result in deceiving
buyers and sellers. The making and
publishing of quotations for commodi-
ties or aecuritles by groups of men
calling themseives an exchange, or by I The report is signed by the mem-
any other aimiiar title, whether incor-1 bers of the committee as follows;
porated or not, should be prohibited Horace White, chairman; Charles A
by law. where such quotations do not Sehieren, liavld Levenl.rltt. Clara
fairly and truthfully represent an} : Williams, John It. Clark, Willard \
bona fide transactions on such ex-! King, Samuel H. Ordway, Edward i>
changes. Under present conditions,! Page, Charles Sprague Smith, Maurice
w«- are of Uie opinion that Du- mercan- j L. Muhleman, secretary.
tile and metal exchanges do actual --------
harm to producers and consumers, and ARE YOU GOING AWAY?
that their charters should be repeal- j Resuters of The Times who leave
ed." I the city for the summer and who
The committee closes with a review j may desire to keep In touch with El
of the experience of Germany in re-. Paso affairs should order The Times
striding exchanges and points out. the ! sent to their summer address. Tbe
unfavorable results of the German leg- addresses will bo changed as many
islatinn. There is an addendum con-1 time* as desired. W'hen ordering a
corning the complain! of the New j change the old and I ho new addresses
York Bank Note company that the should be given. Telephone your
stock exchange prevents any company; order to the circulation department,
except the American Dank Note coin- Bell 281, Automatic 1281.
pany from engraving any securities j ———---——r——
dealt in on that exchange. After a He Knew the Book,
discussion of this complaint, and the \ After the Caster holidays a school
answer of the stock exchange thereto j teacher thought it would be a good
the committee says "It would seem i opportunity to tell his class something
that other considerations than thejabotit the religious significance of the
goodness of the work and carefulness' holiday. "Now, boys,” he »aid, ad-
in guarding tbe plates are here opera-
tive, and that the mock exchange has
not rid Itself of the evils of monopoly.
dressing tbe youngsters, “which of
you can tell me something about Good
Friday?” “Please, sir,” said one little
urchin, “he was the fellow what done
the housework for Robinson Crusoe!”
— Philadelphia Inquirer.
Tbe importation of Ceylon elephants
to work in the Philippine lumber
camps U proposed to make up for the
scarcity of draft animals in the Is-
lands.
TO CONTRACTORS
Under concessions from the govern-
ment of Mexico The Cananea Consoli-
dated Copper Company, 8. A., Is
building a railroad across Northern
Mexico. Bids are requested on grad-
ing of same.
For full particulars, profiles, speci-
fications, directions for bidding, and
other information, apply at the office
of the company at Douglas, Arizona
Signed,
THE CANANEA CONSOLIDATED
COPPER COMPANY, S A.
Chas, 8. Henning. Chief Engineer.
Approved: L, D. Ricketts, President.
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El Paso Morning Times (El Paso, Tex.), Vol. 29, Ed. 1 Thursday, June 17, 1909, newspaper, June 17, 1909; El Paso, Texas. (https://texashistory.unt.edu/ark:/67531/metapth583695/m1/3/: accessed April 25, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Abilene Library Consortium.