COMMITTEE EXHIBIT NO. 114, FEBRUARY 26, 1934 (This exhibit consists of a letter dated November 27, 1933, from Charles E Hudson, President, San Francisco Mining Exchange, to Ferdinand Peri together with accompanying data, letter appears in full on page 1209.) SECRETARY'S OFFICE, SAN FRANCISCO MINING EXCHANGE, 327 Bush Street, San Francico, Nov. 27, 1939. Mr. FERDINAND PECORA, 285 Madison Ave., New York City. DEAR SIR: Complying with your request we are inclosing herewith_toda quotation sheet which gives the bids and offers and sales of stocks listed on th Exchange, together with the names and addresses of the members of the Exchange In this connection, I wish to remark that our Exchange may be termed a wh chip trading rendezvous for stock. Mining and oil stocks are necessarily of speculative character and we do not attempt to make the public think that they are anything else. A hole in the ground today may be a mine of value tomorr and the mine of immense development may run out of its ore and be a tremendo hole in the ground the next day. Our stocks for that reason, as I said before, are speculative and do not have the immense quantity of water that many of th industrial stocks contain. The fact is, we have to supply water from the deser area while the industrials are usually organized by promoters and supplied with water with great hydraulic pumps from the Atlantic Ocean. If we can be of further service, we are at your command. Yours very truly, P.S.-The bankers generally don't help us because our activities interfer with their game. SAN FRANCISCO MINING EXCHANGE (FOUNDED 1862) Public sessions: Daily, 9:30 to 1:30; Saturday, 9:30 to 11:30 327 BUSH STREET, SATURDAY, NOVEMBER 25, 1933. PHONE GARFIELD 3206 OFFICERS Chas. E. Hudson, President; W. H. Hannon, Vice President; K. Cohn, Secretary; R. A. Broy, Treasurer. MEMBERS Amigo, H. J., Russ Bldg. (H. J. Amigo & Co.). Bevis, J. E., Reno, Nev.; Brown, R. Fred, 327 Bush St.; Broy, Geo. L., 381 Bush St.; and Broy, R. A., 381 Bush St. (Geo. L. Broy & Co.). Busby, F. M., 155 Montgomery; Clemens, G. M., 155 Montgomery (R. L. Colburn Co.), 639 S. Spring St., L. A. Coe, E. W., 127 Montgomery (E. W. Coe & Co.). Coffin, A. F., 335 Bush St. (A. F. Coffin & Co.). Cohn, K., Russ Bldg.; Elliot, Emery W., 514 Mills Bldg. (Elliot & Co.). Epstine, C. B., 329 Bush St.; Epstine, H. E., 329 Bush St.; Eyre, Perry, Merchants Exchange. Flach, Geo. J., 321 Bush St. (Hudson Sons Co.). Forsyth, W. D., 321 Bush St.; Frankenthal, A., New York City; Goodman, Gerald M.; Hannon, W. H., Alexander Bldg.; Harris, D. D., 335 Bush St. (A. F. Coffin & Co.). Hayward, F., 155 Montgomery; Hudson, Chas. E., 321 Bush St. (Hudson Sons Co.). Judge, Jr. Martin, 1 Montgomery (Martin Judge, Jr. & Co.). Kendall, Zeb, Virginia City, Nev.; Kinley, W., Mills Bldg.; Kryer, L. H., Los Angeles, 639 So. Spring St. Leary, E. R., 321 Bush St.; Nowell, A. R., 415 Montgomery (Lohmann & Nowell). Peters, H. Z., Russ Bldg.; Richardson, J. N., 327 Bush St.; Schlanzer, F. A., Reno, Nev.; Shaw, B. F., 127 Montgomery St. (Shaw Bros.). Thomas, Arthur, Salt Lake City (Arthur Thomas, Inc.). Walker, F. H., 155 Montgomery (Gartland & Walker). Wilson, Boyd L., Berkeley; Wingfield, Geo., Reno, Nev.; Wollberg, A. S., 325 Bush St. (Zadig & Co.). Zeitlin, R., Los Angeles (E. Graham Elliott Co.). Investigate Facilities for investigating securities are available for every one. before investing. Stocks listed on a recognized exchange are safer than unlisted issues. only in listed stocks. Trade The data on these sheets are collected with care, but neither the completeness nor the accuracy of the information is guaranteed; no responsibility is assumed for any of the statements herein contained nor for any omissions or inaccuracies therein. COMMITTEE EXHIBIT NO. 115, FEBRUARY 26, 1934 Mr. Chairman, as I stated in my opening remarks, the New York Stock Exchange has constructive suggestions to make in regard to the pending legislation for the regulation of stock exchanges. The purposes to be accomplished by such legislation are: First, the prevention of fraudulent practices affecting stock exchange transactions; Second, the prevention of the use of an excessive amount of credit for security speculation; and, Third, the elimination of practices which, though not fraudulent, permit the manipulation of security prices. The most important question in regard to any regulatory legislation is the determination of what body shall exercise the regulatory power. Obviously this body, whether it be called a commission or an authority, must include persons who are familiar with credit conditions throughout the United States and also persons who are fully conversant with the technical problems connected with the operation of stock exchanges. In addition, a majority of the members of such a body should be outstanding individuals who would represent the public. Having this in mind, we suggest the creation of a Stock Exchange Coordinating Authority to consist of seven members. We suggest that this Authority be composed of two members appointed by the President; two Cabinet officers, who might well be the Secretary of the Treasury and the Secretary of Commerce; one person appointed by the Open Market Committee of the Federal Reserve System; and two persons representing stock exchanges, one to be designated by the New York Stock Exchange and the other to be elected by the members of those exchanges in the United States, other than the New York Stock Exchange, that primarily offer a market place for securities. Such an Authority would not only represent the interests of the public but would have the benefit of the opinions and advice of two Cabinet officers, and through its connection with the Open Market Committee of the Federal Reserve System would be in close contact with credit conditions throughout the United States. It would also include men who had detailed technical knowledge of exchange operations. We suggest that this Coordinating Authority be given plenary power to control the amount of margins which members of exchanges must require and maintain on customers' accounts; and further, that it should have plenary power to require stock exchanges to adopt rules and regulations preventing not only dishonest practices but also all practices which unfairly influence the price of securities or unduly stimulate speculation. Without attempting to define, at this time, the scope of these powers, we believe that they should include the power to fix the requirements for the listing of securities; the control of pools, syndicates and joint accounts and also options intended or used to influence market prices; the power to control the circulation of rumors or statements calculated to induce speculative activity, the use of advertising and the employment of customers' men or other employees who solicit business; to the end that all practices which may tend to create unfair prices may be eliminated. This authority should also have power to study, and, if necessary, to adopt rules in regard to those cases where the exercise of the function of broker and dealer by the same person is not compatible with fair dealing and to adopt rules in regard to short selling, if it should become convinced that regulation of this practice is necessary. These suggestions represent the considered view of the New York Stock Exchange and I have been authorized to present them by the Governing Committee of the Exchange. I can say confidently that the Exchange will cooperate fully in attempting to prevent unwise or excessive speculation and abuses or bad practices affecting the stock market. I appreciate the courtesy which the Committee has extended to me in affording me this opportunity to state fully the position of the Exchange in regard to this bill. I trust that the Committee will feel free to ask for any information which it may desire from the Exchange or its officials. I can assure you that all of the records of the Exchange of every character and nature will be made fully available to you and, in addition, not only the officials of the Exchange but all of its technical experts are at your disposal. COMMITTEE EXHIBIT NO. 116, FEBRUARY 26, 1934 Mr. Chairman, as I stated in my opening remarks, the New York Stock Exchange has constructive suggestions to make in regard to the pending legisla tion for the regulation of stock exchanges. These suggestions are naturally subject to the question of the constitutional power of Congress to enact legislation regulating the business of stock exchanges and their members. The purposes to be accomplished by such legislation are: First, the prevention of fraudulent practices affecting stock exchange transactions; Second, the prevention of the use of an excessive amount of credit for security speculation; and, Third, the elimination of practices which, though not fraudulent, permit the manipulation of security prices. The most important question in regard to any regulatory legislation is the determination of what body shall exercise the regulatory power. Obviously this body, whether it be called a commission or an authority, must include persons who are familiar with credit conditions throughout the United States and also persons who are fully conversant with the technical problems connected with the operation of stock exchanges. In addition, a majority of the members of such a body should be outstanding individuals who would represent the public. Having this in mind, we suggest the creation of a Stock Exchange Coordinating Authority to consist of seven members. We suggest that this Authority be composed of two members appointed by the President; two Cabinet officers, who might well be the Secretary of the Treasury |