THE STOCK EXCHANGE AND OVERSELLING.

New Zealand Herald, Volume XLIX, Issue 14930, 1 March 1912, Page 4

THE STOCK EXCHANGE AND OVERSELLING.

Sir,—lf Mr. Selwyn Mays is correctly reported, ho made certain statements before Mr. Justice Chapman in commenting on the' Lennox caso in respect to the Auckland Stock Exchange, and certain members of that body, which are absolutely contrary to fact. Mr. Mays is reported to have stated that "the question of overselling had become absolutely notorious, and at the present time the Auckland Stock Exchange reeked in the nostrils of,the honest men of the community." This is a very wild statement, and oasts an unjust aspersion upon a body of gentlemen, most of whom stand us high in the opinion of those whose opinion is worth having, as men of ster-1 ling integrity, honesty of purpose and commercial morality, as any equally largo body of gentlemen in this city or throughout the. Dominion.

Mr. s Mays is ■ further reported to have stated that "since the prisoner's bankruptcy there had been another serious wave of overselling on the Auckland Stock Exchange. . One man had gone out for so doing, and another sound man had been submerged, but had got his head above water." In : this ■> statement Mr. Mays con- . voys the impression that recently two members of the Auckland Stock Exchange had got into financial, trouble through overselling. Again I say this is absolutely incorrect. Mr. Mays should know, and it may be as well to remind the public, that the Auckland Stock Exchange deprecates overselling as much as any person in the community. Its rules aro framed to prevent overselling. Let mo quote rule 86, ; which bears on the question. It reads "Three clear days shall bo allowed for delivery of documents by the seller, and failing delivery thereof during that period, the buyer may, after 1 p.m. on tho third day, give 24- hours' written notice to tho seller to deliver such documents, and failing such delivery the buyer may either cancel the purchase or buy at the risk of tr%, seller through the chairman of the Stock Exchange."' ■C The rules of the Exchange further provide for the penalties which can be inflicted upon a member who makes default in his engagements, or commits any breach of the ] rules. These comprise heavy fines, suspen- ; eiion or expulsion from the Exchange, which latter penalty includes forfeiture ofhis seat i and all interests in the valuable assets of the Exchange". The public will readily perceive the great risks which an overselling member of the Exchange takes upon himself, 1 risks' which must. sooner or "later involve him in disaster. It is grossly unfair to the general body of the members of tho Exchange to impute to thorn a practise which is universally condemned by them, and which some of their rules aro framed expressly, to provide against. : I think before gentlemen - occupying the position Mr. Mays occupies proceed to make remarks such as Mr. ; Mays is reported to, have made it would be only courteous if they called on the executive officers of the Exchange, and made fuller inquiries. / In conclusion let me say that I think the members of my Exchange have good reason to eel aggrieved at Mr. Mays addressing the Judge as he did. and using the 'language he is reported to have used in reference to the Auckland Stock Exchange in a place where the Exchange had no .opportunity of replying. * G. A. Bnraß, Chairman- Auckland .'Stock Exchange. '.'■'■. ;■> • *