STOCK EXCHANGES

New Zealand Herald, Volume LXXI, Issue 21799, 14 May 1934, Page 9

STOCK EXCHANGES

CONTKOL IN AMEKICA SENATE PASSES BILL PROTESTS NOTWITHSTANDING DRASTIC PROVISIONS By Telegraph—Press Association—Copyrifrhi (Received May 13, 6.35 p.m.) WASHINGTON,-- May 12 The Senate by 62 votes to, 13 passed the Stock Exchange Bill, thu6 vir-tually-completing action by Congress on the measure, it having already been passed by the House of Representatives. With the exception of some relatively unimportant amendments of a technical nature the bill as originally framed will become law in spite of the almost universal protest from stock exchanges in the country. The value of seats on the New York Stock Exchange dropped considerably during the past week when the passage of the bill became assured.

In a message to Congress on February 9 President Roosevelt asked for the regulation of " the operations of Stock Exchanges which deal in securities and commodities," but left to Congress the framing of a suitable measure. While admitting the definite value of the exchanges, the President said: " Wo should be national in policy and restrict as far as possible the use of these exchanges for purely speculative operations. Naked speculation has been made too alluring and far too easy for those who could, and those who could not afford to gamble." A bill was introduced in the Senate by Mr. D. U. Fletcher, chairman of the Finance Committee, providing for the drastic supervision of stock exchanges in the country. The measure, which was 14,000 words long, specified the requirement of a 60 per cent margin for atock purchases or higher, outlawed all manipulative devices; forbade speculation or short selling by corporation officials of the stock of thefr corporation, and provided fines up to 50,000 dollars for breaches. Under the bill a Federal Trade Commission will control the volume of stock market credit, restrict short selling and protect the public interests in all exchange operations.