TO STOP SPECULATION.

Press, Volume XLIX, Issue 14823, 14 November 1913, Page 5

TO STOP SPECULATION.

VAIN ATTEMPTS ON THE

CONTINENT,

SPECUI/'ATIOK -EVERYWHERE

INCREASING

(from a coitnEsroNDKjrr.) BERLIN, October 14. Europe is making brave attempts to fight speculation and speculators; to stop Stock Exchange abuses, and generally to cure the ills ( which spring from tho human passion ' for getting rich —and poor—in a hurry. As a result of the recent Stock Exchange gambling craze, a new anti-epeculation law is being prepared in Austria, which will make it practically impossiblo to trade on margine: in Norway the very right to speculate is denied by a large group of politicians; and Germany has its chronic warfare against tho Bourse roflected in several laws which experts cay effect just the.contrary of that which they aim at. Everywhere people are declaiming, against the abuses of speculation, and everywhere speculation is raging more than it did bef6re. From the present proposed antispeculation laws the experts on such matters expect little result. They agree that all past anti-speculation laws liavo failed, and that some or them have produced evils which, did not formerly exist. The. main difference is tnat gambling in stocks and shares goes on in less open and less honest forms than before. .Also, it is complained that the countries With anti-speculation laws suffer, as compared with countries which have no such laws, by the flight of capital and business; by the <iepressivo effect which a chronically inactive Bourse has upon State securities; and by the extreme liability of inactive Bourses to panics on small or no cause. In France, Germany, and Austria business men never cease clamouring for the Anglo-American system under which Stock Exchanges and private corporations are regulated only by tho law. They complain or Government control, which i 3 chiefly exercised by bureaucrats who know nothing of commercial finance. In France, under a law of Napoleon, tho Bourse is nothing but a State institution; and elsewhere on. the Continent it is nothing "but an appendage to the State. In Austria ho Stock Exchange may be constituted without the approval ot both the Minister of Finance and the Minister of Commerce. Once the Bourse is constituted it is put under tho control of State '"Commissaries." In Germany since 1896 a similar system has prevailed. Before then the separate States had their own Bourse laws, hut there is now a homogeneous "BoerseuKosetz" for the wholo Empire; and under this both the Imperial Bunriesrat and the State Governments have powers to control. To found a Stock Exchange needs Stato consent, and any Exchange founded without consent may bo closed summarily by the police. As in Austria, State "Commissaries, with the rank of officials, represent the authority of tho Government. The power which is most resented is the power given to the Bmulesrat to say what classes of securities shall and shnll not be dealt in. In addition j there are tho usual penal laws against ; '■ngpng- But the main interfer- ■! encQ of the Stato is in checking specu- ! lation Scotcs of paragraphs are directed against this. It £ a criminal , nnv I' mtent to S ai ". and in Gcrtrol ot the Miautty of Finance. Hoi-

land and Belgium allow freedom to start Stock Exchanges, but even they have some laws which tend to mako* speculation difficult.

Stock Exchange regulation of this kind is not enough for a very largo cku)3 which wants speculation altogether suppressed. Conservative and agrarian politicans are .everywhere unfriendly to the Bourse, and tney demand more and more anti-Bourse laws. Germany has always here led. The stone was set rolling twenty years ago by Hen- yon Gamp, who "is still a prominent Reichstag member, by the former Speaker, Count yon Ballestrem, and by a Deputy named Cluny. The Prussian Conservatives were then under the impression that exchange speculation sent down the price which they got for their grain. In particular they disliked speculating in grain for future delivery. In this there was nothing new. Holland at the beginning of the seventeenth century attempted in vaii to suppress grain speculation The German anti-specu-lation campaign result is seen to-day in rigid restriction of speculation in both grain and stocks. Only a limited class can- lawfully indulge in it; and then under burdensome conditions, as laid in the' two great Bourse laws of

Nearly all disinterested authorities on financo condemn the anti-specula-tion laws. • One of tho latest to condemn them is Professor Richard Ehrenberg, of Rostock University, who says tnat there are even worse features in these laws than their .complete failure to act. "Much'worse is the constant injury which they do to the ponular sense of justice and morals. Tho prohibitions are easily evaded, but the enactment that certain kind 3of trading in stocks cannot be enforced in court is taken advantage of by dishonest speculators wlu.m their speculations fail. But even that is not the worst. Worse still is the serious injury which is done to the authority of the State, when it repeate legislation which centuries of experience showe is bound to be ignored and to fail,"