OF 1933 AND TO THE SECURITIES EXCHANGE ACT OF 1934 H. R. 4344, H. R. 5065, and H. R. 5832 BILLS RELATING TO PROPOSED AMENDMENTS Printed for the use of the Committee on Interstate and Foreign Commerce HG4556 Bollard, Ralph H., vice president, Dillon, Read & Co., New York Folger, J. C., representing Folger, Nolan & Co., Inc., Washington, Twombly, Edward B., of Putney, Twombly & Hall, New York City- Jones, Frayser, representing the National Association of Manu- 467 Ecker, F. W., vice president, Metropolitan Insurance Co., New York Brown, Francis C., General Counsel, Federal Deposit Insurance Wiggins, A. L. M., American Bankers Association, Hartsville, S. C. 523, 553 Brown, Edward E., president, First National Bank, Chicago, Ill. Love, Edward L., vice president, Chase National Bank, New York Oliver, Fred N., general counsel, National Association of Mutual Purcell, Hon. Ganson, Commissioner, Securities and Exchange Com- Davis, Arthur G., Investors Bankers Association, Chicago, Ill. Dickson, Rush S., president, R. S. Dickson & Co., Charlotte, N. C. Loudon, Paul W., of Piper, Jaffray & Hopwood, Minneapolis, Minn. Reis, Bernard J., executive director, American Investors' Union, New Putney, William B., 3d, of Putney, Twombly & Hall, New York City.. Second supplement to tabulation 2 above, investors without oppor- tunity to buy $802,000,000 private placements issued in 1938-- Sales of public-utility bonds in the District of Columbia___ Table I. Corporate bonds purchased privately from issuers by the 646 from registration and total domestic corporation and foreign 366 Supplementary tables to last above- Total dollar amount of domestic corporation and foreign issues in 405 Total dollar amount of bond issues in all domestic corporation 405 Three telephone issues, price prevailing at a given time. 418 Statistical tables submitted-Continued. Three industrial issues, prices prevailing at a given time.... Seven industrial issues, prices prevailing at a given time.. Seven public utilities issues, prices prevailing at a given time_ Tabulation 1. Certain reported "private placements" and outstanding securities refunded by such "private placements". Tabulation 2. Analysis of purchases of certain new bond and note issues by insurance companies, foundations, universities, pension funds, and savings banks (to the extent reported) - Tabulation 3. Break-down of 1938 "reported private placements" on Tabulation 4. Institutional holders of new bond and note issues of $1,000,000 or more whose registration became effective during 1938, Chart, supervision of the commercial banking system... Appendix I. Showing increase in private placement problem... Communications and memoranda submitted- Memorandum by Churchill Rodgers, assistant general counsel of 512 Letter from Carrol M. Shanks, vice president and general counsel, 515 Letter from Hon. Leo T. Crowley, Chairman, Federal Deposit Insur- 517 Letter from Hon. Marriner S. Eccles, Chairman, Board of Governors 519 Letter from Hon. Preston Delano, Comptroller of the Currency, 520 Joint statement by the Comptroller of the Currency, the Board of 520 PROPOSALS FOR AMENDMENTS TO SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934 FRIDAY, NOVEMBER 7, 1941 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., in the committee room, New House Office Building, Hon. Clarence F. Lea (chairman) presiding. The CHAIRMAN. The committee will come to order. Mr. Stewart, you may proceed. BEGINNING ITEM NO. 2 ON AGENDA FOR AMENDMENTS TO SECURITIES ACT OF 1933 STATEMENT OF R. McLEAN STEWART, CHAIRMAN, SECURITIES ACTS COMMITTEE, INVESTMENT BANKERS' ASSOCIATION OF AMERICA-Resumed Mr. STEWART. Mr. Chairman, I am addressing myself this morning to the proposed section 2 (14), which appears in the committee print beginning at page 9. The whole scope of the Securities Act of 1933, as an act to provide for the full and fair disclosure of information as to the character of securities sold in interstate commerce, is determined by the interpretation placed on the meaning of the term "public offering." We respectfully recommend that the term "public offering" be defined as proposed in the draft contained in the print, beginning at line 19, page 9, and continuing through lines 1 to 22, inclusive, on page 10. Although the Commisison does not propose, it does not oppose this amendment. As stated in the print, the Commission's position is discussed at pages 18 and 19 of its printed report. The position of the securities industry is discussed at pages 31 and 33 of our report of July 30, 1941. It would be idle to pretend that we have no selfish interest in proposing this new section to 2 (14). We have. Under the situation which exists today we are denied the opportunity of competing with the large insurance companies and other large institutions on an equal basis under the law. A healthy investment banking organization cannot exist unless something is done along the lines of the proposed section 2 (14) to correct the situation which now exists. The public as a whole has a real interest in this situation. Investors |