Full text of Stock Exchange Practices : Hearings Before the Committee on Banking and Currency, United States Senate, (1932-1934) : Hearings on S. Res. 84 : Appendix to Parts 1, 2 and 3

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STOCK EXCHANGE PRACTICES

HEARINGS
BEFO R E T H E

COMMITTEE ON BANKING AND CURRENCY
UNITED STATES SENATE
SEVENTY-SECOND CONGRESS
FIRST SESSION
ON

S. Res. 84
A RESOLUTION TO THOROU GH LY IN VESTIG ATE PRACTICES
OF

STOCK E XCH AN G ES W ITH RESPECT TO TH E
B U YIN G AN D SELLING A N D THE BORRO W IN G
A N D LEN D IN G OF LISTED SECURITIES
TH E VALUES OF SUCH SECURITIES
A N D THE EFFECTS OF SUCH
PRACTICES

Appendix to Parts 1, 2 and 3
S e p t e m b e r , 1, 1932

Printed for the use of the Committee on Banking and Currency

U N IT E D STATES
G O VER N M EN T PR IN TIN G OFFICE}
119862

W A SH IN G T O N : 1933

COMMITTEE ON BANKING AND CURRENCY
P E T E R NOR BECK , Soi
S M IT H W . BR O O K H AR T, Iowa.
P H IL L IP S L E E GOLDSBOROUGH, Maryland.
JOH N G. T O W N SE N D , J r ., Delaware.
F R E D E R IC C. W A LC O TT , Connecticut.
JOHN J. B L A IN E , Wisconsin.
R O BER T D. CAR EY, Wyoming.
JA M E S E. W A TSO N , Indiana.
JAM BS COUZENS, Michigan.
F R E D E R IC K S T E IW E R , Oregon.
J u l ia n W . B i

Dakota, C hairm an
D U N CAN U. F L E T C H E R , Florida.
CAR TER G LASS, Virginia.
R O BE R T F . W A G N E R , New York.
A L B E N W . B A R K L E Y , Kentucky.
R OBER T J. B U L K L E Y , Ohio.
CAM ERO N M ORRISON, North Carolina.
T H O M A S P. GORE, Oklahoma.
E D W A R D P. CO STIG AN , Colorado.
CORDELL H U L L , Tennessee.
* t, Clerk

CONTENTS
Advertising, committee on business conduct, New York Stock Exchange, Pa*e’
circulars regarding (exhibit 31, Apr. 21, 1932)-----------------------------------116*
Constitution, New York Exchange, Oct. 28, 1931 (exhibit 24, Ape.
21, 1932)_____________________________________________________________
21
Customers’ contracts with members of New York Stock Exchange cover
12£
ing margin accounts, forms of (exhibit 34, Apr. 21,1982)-------------------Day loan agreements with various banks, forms of (exhibit 36, Apr. 21,
147
1932)__________________________________________________ _____________
Fixed investment trusts, requirements of New York Stock Exchange, re
76
garding (exhibit 28, Apr. 21, 1932)----------------------------------------------------General collateral agreements with New York Stock Exchange, forms of
(exhibit 35, Apr. 21, 1932)________ ___________________________________
133
Listed stocks with bank stocks, comparison of (exhibit 22, Apr. 21,1932)_
11
Ownership listed stocks by other companies, the stock of which are listed
(exhibit 32, Apr. 21, 1932)____________________________________________
120
Radio Corporation of America, application of (for listing of new stock).
155
Relation of farm land prices in Iowa to corn prices, chart (exhibit 33,
Apr. 21, 1932)_______________________________________________________
122
Short interest in American and foreign power, charts (exhibit 21, Apr.
21,1932)_____________________________________________________________
10
Short positions, Nov. 12. 1928 and 1929 (supplement to exhibit 23, page
263, Apr. 21, 1932)___________________________________________________
12
Short selling, New York Stock Exchange, individual issues, Apr. 1, 4, 5,
6, 7, 8, 9, 11, and 12, 1932 (exhibit 25, Apr. 21, 1932)__________________
60
Short-selling statistics, Apr. 1, 4, 5, and 6, 1932 (exhibit 9, Apr. 21, 1932)_
1
Stock averages with reserve loans, comparison of, chart (exhibit 38, Apr.
21, 1932)_____________________________________________________ ________
15*
United States Steel, quotations from June 1, 1931, to Apr. 10, 1932 (ex
hibit 21, Apr. 21, 1932)__________________________________________ _____ 10
Variations in prices of corn and wheat traded in on exchanges with
prices of apples and potatoes not traded on exchanges, chart and sta
tistics (exhibit 37, Apr. 21, 1932)____________________________________ • 153
Warner Bros. Pictures, Inc., report on, by standard statistics, and
annual report for year ending Aug. 30, 1930 (exhibits 24 and 25, May
21, 1932)____________________________________________________________
172

in.

STOCK EXCHANGE PRACTICES
APPENDIX TO PARTS 1, 2, AND a
E xhibit No. 9, A pril 11,1932
(See pp. 13 and 33 of this bearing)
Statistics in regard to short selling, New York Stock Exchange, on April 1, 4>
5, and 6 , 19S2
Apr. l
Abitibi Power & Paper Co. (Ltd.).........................................
Abitibi Power & Paper Co. (Ltd.), preferred......................
Adams Express Co.....................................................................
Adams-Millis Corporation.......................................................
Advance-Rumely Corporation....................................... ........
Affiliated Products (Inc.).........................................................
Air Seduction Co. (Inc.)..........................................................
Alaska Juneau Gold Mining Co.............................................
Alleghany Corporation..............................................................
Alleghany Corporation,
per cent preferred $30 warrants..
Alleghany Corporation, 5J4 per cent preferred without war
rants............................: ....................................................... ...........
Allied Chemical & Dye Corporation......................................... .
Allied Chemical & Dye Corporation, preferred........................
Allis-Chalmers Manufacturing Co..............................................
Amerada Corporation.....................................................................
American Bank Note Co...............................................................
American Beet Sugar C o ...............................................................
American Brake Shoe & Foundry Co., preferred....................
American Can Co............................................................................
American Can Co., preferred........................................................
American Car & Foundry Co.......................................................
American Car & Foundry Co., preferred..................................
American Chicle Co........................................................................
American Commercial Alcohol Corporation, voting trust
certificates......................................................................................
American European Securities.....................................................
American & Foreign Power Co. (Inc.).......................................
American & Foreign Power Co. (Inc.), preferred.....................
American & Foreign Power Co., second preferred (A) $7 cu
mulative.........................................................................................
American & Foreign Power Co., $6 preferred............................
American Hide & Leather Co.......................................................
American Hide & Leather Co., preferred...................................
American Home Products Corporation......................................
American Ice Co...............................................................................
American International Corporation...........................................
American Locomotive Co..............................................................
American Locomotive Co., preferred..........................................
American Machine & Foundry Co..............................................
American Machine & Metals (Inc.)............................................
American Metal Co. (Ltd.)...........................................................
American News Co. (Inc.).............................................................
American Power & Light Co.........................................................
American Radiator & Standard Sanitary Corporation...........
American Rolling Mill Co.............................................................
American Safety Razor Corporation............................................
American Ship Building Co..........................................................
American Smelting & Refining Co..............................................
American Smelting & Refining Co., 7 percent preferred........
American Smelting & Refining Co., 6 per cent preferred___
American Snuff C o .........................................................................
American Steel Foundr.es..............................................................
American Stores Co.........................................................................
American Sugar Refining Co.........................................................
American Sugar Refining Co., preferred.....................................
American Sumatra Tobacco Co...................................................
American Telephone & Telegraph Co........................................

Apr. 4

Apr. 6

25
25
14,020
125
43
200
6,615
10,571
8,182
205

25
25
14,070
125
43
15
6,675
18,116
4,532
205

25
25
14,020
125
43
300
5,795
19,464
4,942
205

25
25
14,120
125>
43
400
5,570
18,894
4,930
105

100
69,697
40
949
185
75
10
3
103,615
1
125
8

100
68,080
40
974
185
85
10
3
102,283
106
125

100
63,420
40
874
185
85
10
6
91,010
105

100
64,81540
674
195
85
10
6
84,694
105
25

3,645
200
30,429
75

2,690
300
20,964

2,370
800
19,649

1,770
1,000'
19,279>

270
271
10
120
105
1,525
970
425
450
400
35
925
200
3,041
1,312
1,040
40
18
7,385
125
50

265
120
10
120
205
1,325
870
225
530

240
120
10
120
180
1,345
795
225
545

35
1,025
200
2,747
1,324
1,440
40
18
7,505
155
50
200
22
150
385
45
25
261,879

35
1,025
200
2,522
1,987
390
40
8
7,425
155
50
200
22
390
545
45
25
194,637

255
120
10
120
220
1,345.
754
225
545
100
35
925*
200
2,312
1,290
290
20
8
7,590
155>
50
150
40
630
345
45
25
197,695

100

22
100
375
145
25
182,019

STOCK EXCHANGE PRACTICES

Statistics in regard to short selling, New York Stock Exchange, on April 1,
5, and 6, 1982— Continued
Apr. 1
American Tobacco C o ______ ____________ . _ . . .................
American Tobacco C o., class B __________ __________________
American T yp e Founders C o ______________________________
Am erican W ater W orks & Electric Co. (In c.)______________
Am erican W ater Works & Electric C o. (Inc.), voting trust
certificates__________________________ ___________
American W oolen C o _____________________ ____ ____ _____
Am erican W oolen Co., preferred.____ ______________________
American Zinc Lead & Smelting Co., preferred_____________
Anaconda Copper M ining C o______________________________
Anchor Cap Corporation_________ _________________________
Arm our & Co. (Delaware), preferred________________ ____
A rm our & Co. (Illinois), class B ________ __________________
Arm our & Co. (Illinois), preferred....... ................................... . .
Artloom Corporation, preferred________________________ ._
Associated Oil C o_____________ ___________________________
Atchison, Topeka & Santa Fe R y. C o____ _________________
A tlantic Coast Line R . R . C o______________________________
A tlantic Refining C o____ __________________
_
_.
Atlas Powder C o..... .......... .............................................................
A uburn Automobile C o____________________________________
. . ________
& Co. (Inc.), prior A _________
A ustin .Nichols
A viation Corporation (The) of Delaware_____ _____________
B aldwin Locom otive W orks_________
...
. . . . . . . ___
B aldw in Locom otive Works, preferred____ _________ ______
Baltim ore & Ohio R. R . C o _______________ ________________
Baltim ore & Ohio R . R . Co., preferred___ _________________
Barnsdall Corporation, class A ___________ _________ . _ . . .
Beatrice Creamery C o_______________________ _____________
Beech-N ut Packing Co
Best & Co. (In e.)__

_____________ . . .

___

______

_____________ _______________________

______________________________

Chicago, Milwaukee, St. Paul & Pacific R . R . Co., preferred.

A pr. 5

Apr. 6

1,300
26,750
10
2,505

1,300
26,970
10
3,015

1,000
28,738
10
2,940

1,000
30,276
10
3,000

25
44
882
100
41,105
200
190
200
200
75
14, 552

25
44
2,687
100
38,255
100
190
200
200
340
75
14,960

301
770

301
670

25
44
4,002
100
31, 374
100
175
600
500
50
75
15, 530
50
301
670

60,255
10
25
1, 326
22
5,926
485
5
100
385
20
100
25
14,657
1,955
68,598
990
730
25
18,455
300

52,105
10
1,005
1,401
7
4,696
455
5
120
325
20
100

48,061
10
980
1,095

25
230
4,001
100
33, 255
100
185
200
200
50
75
21,079
50
301
680
57
48,358
10
980
1,195

4,991
455
5
120
325
70
100

5,141
355
5
120
325
70
100

14,104
2,455
61,953
1,045
805
25
19,264
110

595

795
100
3, 581

14,135
2,920
66,309
1,415
590
50
19, 393
167
100
565
100
3,065
25
955
100
100
40

1,055
200
100

1,055

13,047
3,105
66,181
1,245
590
25
19, 789
110
100
815
100
3,401
25
1,055

100

40
700

40
100

200
1,285
350

200
1, 385
350
1
601
1, 555
300
50
100
350
11, 996
205
86,709
5
422
35
600

200
1,215
350
1
601
1, 505
200
50
100
350
12,053
205
81,126
5
422
35
575

100
200
1,095
375
1
601
1,505
200
60
100
335
11, 833
205
79,279
5
500
35
1,600

2,155
2,846
9,412
175
107
4,950
1,730

5
1,981
8,117
175
7
5,130
1, 630

105
1,891
8,152
175
207
5,180
1,330

2,971

Bulova W atch Co. (I n c )..

Apr. 4

1
1,826
500
83
100
300
9,373
205
101, 609
5
722
35
1,775
25
2,155
4,181
8,279
175
377
4,950
30

STOCK EXCHANGE PRACTICES

Statistics in regard to short selling, New York Stock Exchange, on April 1, 4,
5, and 6, 1982—Continued
Apr. 1

Apr. 4

Chicago i f North Western Ry. Co . ................. ......... 1,300
1,350
..........
Chicago
. . PnwnmtinTool
. , ____
Co240... ...... 215
Chicago, Kook Island & Pacific Ry. Co
3,108
3,233
______ ___________________________
Chicago’Yellow Cab (Inc.)
Childs Co...........................................................................................
50
50
Chrysler Corporation_____________________________________ _
12,235
11,955
& Fuel Co________________. _______________________
City Ice
296
296
City lee & Fuel Co., preferred_____________________________
City Stores Co_____________________________________________
470
70
Coca-Cola Co. (The)........................................................................
18,375
23,185
Coca-Cola Co. (The), class A _______________________________
210
110
Colgate-Palmolive-Peet. Co .
- ...........
.....
460
360
Colorado Fuel & Iron Co__________________________ ________
45
45
Colnmhia Gas
F.lijntric Corporation..................
3,638
3,703
Columbia Oas & Electric Corporation, 6 per cent preferred..
205
155
Columbia Oas & Electric Corporation, 5 per cent preferred..
57
57
Columbia Pictures Corporation, voting trust certificates for
100
100
Columbian Carbon Co., voting trust certificates____________
3,190
3,210
150
_____ . . . . . ___ ,Commercial
____ ___ _ Credit Co.’
100
Commercial Credit Co., 6H per cent preferred______________
40
40
5
Commercial Credit Co.j 6 per cent preferred_____________ . . .
15
5
Commercial Credit Co., 8 per cent preferred__________ _____
Commercial Investment Trust Corporation________________
1,435
1,310
Commercial Investment Trust Corporation, 6H per cent
preferred__________ ______________________________________
Commercial Investment Trust Corporation, 7 per cent pre
1
1
ferred____________________________________________________
1,211
1,611
Commonwealth & Southern Corporation___________________
5,539
276
230
& Southern Corporation,
Commonwealth
preferred________
125
225
Congolenm-Naim (Tno.)
’ * , . _____ ___
25
Consolidated Cigar Corporation, (M per cent preferred..........
50
10
Consolidated Cigar Corporation, 6 H per cent preferred with10
10
400
300
Consolidated Film Industrie® (Inc.) preferred______________
200
200
48,957
51,687
315
405
Consolidated Qas Co., preferred___________ ____ __________
350
200
35,768
Consolidated Oil Corporation______________________________
Consolidated Oil Corporation, preferred______________ _____
163
100
100
50
50
Continental Baking Corporation, class B ..................................
60
60
85
95
7,277
6,427
1,150
550
2,402
2,352
49
749
2
2
6,930
4,570
8
8
3*0
575
148
3

Curtis (The) Publishing Co........................... ................... ..........
Curtiss-Wright Corporation....................... ............................ .

Douglas Aircraft Co. (Inc.)............................................................

DuPont de Nemours (E. I.) & Co...........- .............................. -

530
575

42i
25
50
7,106
155
460
260
415
1,105
400
400
385
25
106
133
150
10
13,378

20
421
25
150
5,876
255
460
360
215
1,440
300
530
285
25
106
133
150
10
18,443

125,066

30,344

Apr. 5

Apr. 6

1,250
215
3,108
6
50
23,070
256
2
470
23,257
110
280
45
3,268
205
57

1,100
215
3,108
6
50
20,665
256
12
470
24,612
110
230
45
3,952
80
57

100
3,480
150
50
5
5
935

100
3,760
200
40
5
5
985
30

1
1,097
364
225
25
10

1
972
5,750
475
25
10

10
300
300
41,995
505
350
35,688
163
100
50
60
195
8,527
1,140
2,112
49
2
6,496
6
20
2,245
575

10
300
272
42,126
515
150
35,098
163
100
50
60
275
8,722
1,340
2,302
49
2
5,491
6

20
421
25
50
5,866
155
460
350
215
1,315
275
530
285
25
133
150
10
16,270
50
118,695

2,480
575
75
421
25
50
3,941
155
460
350
215
1,425
275
630
195
25
33
150
10
17,800
il3 ,812

STOCK EXCHANGE PRACTICES

Statistics in regard to short selling, N ew Y ork S tock Exchange, on April 1, 4,
5, and 6, 19S2— Continued
Apr. 1
Eastman Kodak Co. of New Jersey_____ ___ _______________

Electric (The) Auto-Lite C o______________ __________ _ . ____

33,176
50
100
200
50
345
2, 970

Electric Power & Light Corporation_______________________

350
25, 358

Eitingon Schild Co. (Inc.)

.....................................................

Electric Power & Light Corporation, $6 preferred____ _____

Engineers Public Service Co., $5.50 preferred, without war
rants........... ..................... . .................................................... .........
Engineers Public Service Co., $6 preferred_________________
Equitable Office Building Corporation____________ ________
Erie R . R . C o_______________________ _____ _______________
Eureka Vacuum Cleaner C o ___________ ___________________
Exchange Buffet Corporation..........- .............. ........... ...............
Fairbanks Morse
Co. (Tnc.)
, . _
Federal Light & Traction C o., preferred____________________
Federal M otor Truck C o_____ _______________ _____________
Federal Water Service Corporation, class A ________ ______

Firestone Tire & Rubber C o __________________ _____ ______
Firestone Tire & R ubber Co., preferred, without w arrants..
First National Stores (I n c .) .............. ..........................................
Fisk Rubber Co ........ ............................................... ............... .
F ood M achinery Corporation......................................................
Foster Wheeler Corporation......................... ............. .
..........
Fourth National Investment Corporation, without warrants.
Freeport Texas C o ................................. ................ ........... ...........
Gabriel Co. (T he), class A ________ _____________________ _
General American Investors Co. (Inc.), 6 per cent preferred,
without warrants_______________ ________________________

General M ills (Inc.)...................................... ............ .....................

................................................
Goodrich
......................
(B . F.) C o
Goodyear Tire & Rubber C o .................. .............. ................... .
Goodyear Tire & Rubber C o., first preferred...........................

Grand (F. & W .) Silver Stores (In c.)_______________________

Grant (W . T . ) C o ................................................... .....................

25
1,034
76
120
20
100
1,070
2,190
310
55
100
2
100
234
50
60
2
25
61
2,944
110
300
250
500
660
1,116
100
50
1,056
300
1,025
10
165
1
5
119,425
52
11,985
98
5
365
263,905
200
18
45
600
220
27,157
180
490
40
10
1,294
638
13,257
151
1, 085
1, 650
110
750
154
50
50
1.315

Apr. 4

Apr. 5

A pr. 6

32.307
50
100
200
50
405
3,177
10
350
20,908
75
275
748
56
120

30, 519
50
100
200
50
605
2,587
10
350
17, 085
125
125
704
36
100

29,808
50
100
200
50
595
982
10
350
16,920
375
125
979
36
100

20
100
1,170
1,965
310
55

20
100
1,270
1,865
310
55

20
100
1,370
1,865
300
55

2
100
234
50
60
2
25
61
4,369
110

2
100
309
140
60
2
25
61
4,779
110

2
100
309
440
40
2
25
36
5,199
110

250
500
530
969
100
1

250
590
630
1,108

250
590
330
894

50
1, 326
300
725
10
165
1
5
106,112
52
14,110
98
5
365
270,135
440
10
218
75
600
220
30,731
180
490
40
10
2,450
645
8,972
76
1,085
1,650
110
650
154
100
50
1,040

50
1, 311
300
845
10
165
7
45
95,052
52
13, 770
98
5
365
267,699
190
10
18
25
600
220
31,692
200
490
40
10
2,612
630
6,770
126
1,085
1,950
110
650
154

50
1,421
400
845
10
165
7
75
91,806
52
13,580
98
5
365
262,408
200
10
118
25
600
220
31,075
130
490
40
10
1,437
615
6,570
126
1,385
2,050
110
660
154

50
1,080

50
805

STOCK EXCHANGE PRACTICES

Statistics in regard to short selling, N ew York Stoeh Exchange, on April 1, 4,
5, and 6, 1932— Continued
Apr. 1
Great Northern Iron Ore Properties, certificates of beneficial
interest__________________________________________________
Great Northern R y. Co., preferred_____ ___________________
Great Western Sugar C o _______ ____ ______________________
Great Western Sugar Co., preferred________________________
Grigsby-Grunow C o_______________________________________
G ulf States Steel C o ,____ _________________________________
Hahn Department Stores (In c.)____________________________
Hahn Department Stores (Inc.), preferred_________________
Hall (W . F.) Printing C o __________________________________
Hartman Corporation (The), class B _____ _________________
Hercules Powder Co., preferred________________ ___________
Hershey Chocolate Corporation.............. ...................................
Holland Furnace C o ________ ____ ________________ ____ ___
Hollender (A .) & Son (In c.)_______ ____ . . . ________________
Homestake M ining C o_____________________________________
Houdaille-Hershey Corporation, class B ____________________
Household Finance Corporation, part preferred____________
H ouston Oil Co. of Texas, certificates of beneficial interest..
Houston Oil Co. of Texas (new), voting trust certificates___
H owe Sound Co., voting trust certificates__________________
Hudson & Manhattan R. R . C o ___________________________
Hudson M otor Car C o_____________________________________
H upp M otor Car C o_______________________________________
Illinois Central R . R . C o__________________________________
Illinois Central Leased Lines, sinking fund 4 per cent______
Industrial R ayon Corporation_____________________________
Ingersoll-Rand C o_________________________________________
Inspiration Consolidated Copper C o ________________ ______
Interboro Rapid Transit Co., voting trust certificates______
Interlake Iron Corporation_________________________________
International Business Machines Corporation______________
International Cement Corporation_______ _________________
International Combustion Engineering Corporation________
International Combustion Engineering Corporation, con
vertible preferred________________________________________
International Harvester C o ________________________________
International Harvester Co., preferred_____________________
International Hydro-Electric System, class A _________ ____
International M atch Corporation, particular preferred_____
International Mercantile Marine C o_______________________
International Nickel of Canada (L td .)_____________________
International Nickel of Canada (L td .), preferred___________
International Paper & Power Co., class C __________________
International Salt C o _____ ________________________________
International Shoe C o______________________________________
International Silver C o____________________________________
International Silver Co., preferred_________________________
International Telephone & Telegraph Corporation_________
Interstate Department Stores (Inc.)________________________
Jewel Tea Co. (In c.)_____ ____ ____________________________
Johns-Manville Corporation_______________________________
Johns-Manville Corporation, preferred_____________________
Jones & Laughlin Steel Corporation, preferred_____________
Kansas C ity Southern Railway C o_________________________
Kansas C ity Southern Railway Co., preferred______________
Kaufmann Department Stores (Inc.)_______________________
Kayser (Julius) & C o ._____ _______________________________
Kelly-Springfield Tire C o__________________________________
Kelly-Springfield Tire Co., 6 per cent preferred_____________
Kelly-Springfield Tire Co., 8 per cent preferred_____________
Kelsey-Hayes Wheel Corporation__________________________
Kelvinator Corporation____________________________________
Kendall Co. (The), participating preferred A _____ _________
Kennecott Copper Corporation__________________ _________
Kinney (G. R .) Co. (Inc.), preferred__________ ______ _____
Kresge (S. S.) C o __________________________________________
Kress (S. H .) & C o________________________________________
Kreuger & Toll Co., American certificates for debenture____
Kroger Grocery & Baking C o______________________________
Lambert Co. (T h e )________________________________________
Lehigh Portland Cement C o ____________ ________ _________
Lehigh Portland Cement C o., preferred____________________
Lehigh Valley Railroad C o_______ ________________ ________
Lehman Corporation (T h e )_________ _______________ ____ _
Lehn & Fink Products C o______________ ____ _____________
Libbey-Owens-Ford Glass C o_______ ______________________
Liggett & M yers Tobacco Co., class B _____ ________ ______
Liquid Carbonic Corporation_________ ______ _____________

Apr. 4

A pr. 5

A pr. 6

100
327
25
142
429
28
500

100
477

150
467

140
318
28
520

140
218
28
500

200
25

40
156
134
150
2, 105
25
238
510
490
1, 330
2,180
40
765
1,302
200
1,460
300
10,981
320
115

200
25
3
3,285
600
40
156
105
150
2,100
100
258
310
1,190
1,030
1,505
40
715
1, 477
200
1,135
300
10,297
600
115

79
310
1,090
830
1,760
40
590
1,242
200
1,385
300
10,162
200
170

325
11,865
410
2,989
4, 105
670
4,895
480
50

300
14, 290
410
2,389
3,840
670
5, 545
480
50

300
12,825
485
2,589
3, 740
70
8,120
480
50

1, 320
150
10
57, 800
145
725
9,376
20

1,320
150
4
53,689
145
525
9,716

1, 520
150
4
47, 005
145
475
8,931
2
2

100
317
25
112
282
28
500
25
3
3,500

100
15
100
320
5

........29’
100
10
100

181, 420
2,143
3,180
118
45
1,320
70
300
8,241

10
100

25
1
3, 575
600
40
156
80
125
1,900
69
220
590
330
1,328
40
630
1,232
200
1,285
300
10,666

200
170
30
11,815
480
2,489
3,340
70
6,999
480
50
10
1, 750
100
4
59,700
145
475
9, 366
2

435
5
24

400
5
24

10
100
260
400
5
24

690

1,230
8
910

1,330
8
1,072

3,620
35
118, 771
1, 943
3,495
200
30
45
1, 555
70
300
8,666
25

2,870
35
87, 889
2,543
2, 645
200
30
30
1, 725
70
200
8,411
50

3, 670
85
77,489
2,543
2,355
300
20
30
1,925
70
200
8,561
120

200
1,280
1,340
8
3,120

3,350
600
40
156
80
150
1, 900

STOCK EXCHANGE PRACTICES

S tatistics in regard to short, selling, H ew Y ork Stock: Exchange, on April 1, 4,
5, and 6, 1932— Continued
Apr. 1

L oew ’s ( I n c .) - - ..........- ___________ __________________________
Loft (In c.)________________ ____ _____ _____________________
Loose-Wiles Biscuit C o ___________________ ____ ___________
Lorillard (P .) C o____________________________ _______________
Louisiana Oil Refining Corporation, preferred______ _______
Louisville & Nashville R . R . C o_____________ _________ ___
M ack Trucks (I n c .)....................................... ............ .......... .........
M acy Co. (Inc.) (R . H .)............. ............. ................... ................

A pr. 6

3,937
50
840

1,989

1,995
5
207
690
25
2,118
2,908
1
535
400
865

4,802
50
940
100
1,550
5
257
785
25
2,338
2,611
1
710
400
775

90
149
135
207
100
50
100
2,943

90
149
135
237
100
50
100
2,758

25
100
150
20
20
50
15
50
115
100
6,855
2,630
100
4,370
505
200
50

25
100
150
20
20
50
15
850
90
100
6,705
2,730
100
4,074
505
185
50
50
5
430
7,060
2

90
49
235
237
100
50
100
2,697
800
25
100
150
20
20
00
50
915
59
135
7,105
2,940
100
3,774
405
18
50
50
5
230
6,135
2

10,134
1,955
11,865
57
225

9,010
2,085
11,238
57

10,361
2,065
11,408
57

1,335
10
1
6,125
30
50
4,055
235
100
300
55,263
100
5,874
40
190

1,220

1,240
2
1
8,665
30
50
5,945
135

307
605
25
1,943
3,268

4,592
505
350
50
655
6,605
2
30
9,252
1,440
11,531
57
233
9
1, 210

Apr. 5

4,460
50
1,740

285
400
865
100
90
49
235
242
100
50
200
3,733
100
25
100
50
20
220
50
15
50
115
no
6,630
2,825

N ew York, N ew Haven & Hartford R . R . (T h e), preferred.
N ew York, Ontario & Western R y. C o....... ....................... .......

Apr. 4

2
7,845
0
50
3,585
235
100
300
48,966
100
7,321
30
190

5
130
9,675
2

1
7,215
30
50
5,670
235
5
400
52,882
100
5,579
40
190

6,217
50
1,340
100
965
207
785
25
2,313
3,166
51
760
400
765

500
52,327
100
5,264
67
290
10

10
40
45
40
40
20
20
20
25
620
845
755
720
1,837
2,257
2,532
2,205
2,240
2,140
2,240
2,040
88,057
79,953
81,764
85,272
200
N orth American Co. (The), 200
preferred.........................................
100
600

STOCK EXCHANGE PBACTICES

Statistics in regard to short selling, New York Stock Exchange, on April 1, 4,
5, and 6\ 1982—Continued
Apr. 1
North American Edison Co., preferred..................................... .
Northern Pacific Ry. C o ............................................................ .
Ohio 0 0 Co. (The)..........................................................................
Otis Elevator Co...................................... .......................................
Otis Steel Co....................................................................................
Otis Steel Co., preferred................................................................ .
. Owens-Illinois Olass Co................................................................ .
Pacific Gas & Electric Co..............................................................
Pacific Lighting Corporation........................................................
Pacific Telephone & Telegraph Co.............................................
Pacific Telephone & Telegraph Co., preferred........................ .
Packard Motor Co..........................................................................
Panhandle Producing & Refining Co., preferred.....................
Paramount Publix Corporation...................................................
Pathe Exchange (Inc.).................................................................. .
Patino M . & E . Consolidation (Inc.), American shares.........
Peerless Motor Car Corporation..................................................
Penick & Ford (Ltd.) (Inc.).........................................................
Penney (J. 0 .) Co.......................................................................... .
Pennsylvania-Dixie Cement Corporation, preferred...............
Pennsylvania R. R. Co..................................................................
Peoples Drug Stores (Inc.)............................................................
Peoples Gas Light & Coke Co. of Chicago............................... .
Pere Marquette Ry. Co., preferred.............................................
Petroleum Corporation of America............................................ .
Phelps Dodge Corporation............................................................
Philadelphia & Reading Coal & Iron Corporation..................
Phillips-Jones Corporation, preferred..........................................
Phflip-Morris & Co. (Ltd.) (Inc.)...............................................
Phillips Petroleum Co....................................................................
Pierce-Arrow Motor Car Co., class A .........................................
Pierce-Arrow Motor Car Co., preferred......................................
Pierce Petroleum Corporation......................................................
Pillsbury Flour Mills (Inc.)..........................................................
Pirelli Co. of Italy, American shares...........................................
Pittsburgh Coal Co. (of Pennsylvania)......................................
Pittsburgh Coal Co. (of Pennsylvania, preferred)...................
Pittsburgh Steel Co., preferred.....................................................
Poor & Co., class B .........................................................................
Prairie Oil & Gas Co. (The)..........................................................
Prairie Pipe Line Co. (The).........................................................
Procter & Gamble Co.....................................................................
Public Service Corporation of New Jersey.................................
Public Service Corporation of New Jersey, 7 per cent pre
ferred...............................................................................................
Public Service Corporation of New Jersey, 6 per cent pre
ferred...............................................................................................
Pullman (Inc.)..................................................................................
Pure Oil Co. (The)..........................................................................
Pure Oil Co. (The), preferred.......................................................
Purity Bakeries Corporation.........................................................
Radio Corporation of America......................................................
Radio Corporation of America, 7 per cent preferred A ............
Radio Corporation of America, $5 preferred E ..........................
Radio-Keith-Orpheum Corporation, new..................................
Raybestos-Manhattan (Inc.).............................................. ——
Reading Co........................................................................................
Real Silk Hosiery Mills (Inc.)......................................................
Remington Rand (Inc.)..................................................................
Reo Motor Car Co...........................................................................
Republic Steel Corporation...........................................................
Republic Steel Corporation, preferred........................................
Reynolds Metals Co.......................................................................
Reynolds (R. J.) Tobacco Co........ ..............................................
Reynolds (R. J.) Tobacco Co., class B .......................................
Richfield Oil Co. of California......................................................
Rossia Insurance Co. of America— ........ .................................
Royal Dutch Co., certificates of ordinary stock, New York
shares...............................................................................................
Safeway Stores (Inc.)......................................................................
Safeway Stores (Inc.), 7 per cent preferred.................................
Safeway Stores (Inc.), 6 per cent preferred.................................
St. Joseph Lead Co........................................... .............................
St. Louis-San Francisco Ry. Co...................................................
Savage Arms Corporation..............................................................
Schulte Retail Stores Corporation................................................
Seaboard Air Line Ry. Co............................................................
Seaboard Oil Co. of Delaware.......................................................

379
784
100
4,095
905
346
20
5,005
24,472
75
1,200

100
38
2,315
20
10,944
372
2,063
300
172
500
30

Apr. 4

1,053
729

100
5,042
755
290
20
5,091
4
22,138
75

1,200
100
38
2,840
20
12,709
372

172
500
30

200

581

466

230
1,000
25

230

100
156
70
10
150
945
3,821
13,771

3,935
402
20
2,815
20,879
250
1,086
6,129

110

2,425
100
25
305
1,064
200
300
45
7,188
700
500
21,145
6,437
91
16
100
1,527
300
70
245
915

1,000
25
100
156
70
2
10
150
945
3,471
14,629

3
3,430
302
10
2.350
18,224
150
1,086
6,074
110
2.350
100
55
305
669
200
300
49
7,163
600
600

Apr. 5

329
684
25
10

100

6,202
565
454
20
5,196
4
75
1,200

Apr. 6
10
928
300
619
25
20
100
6,572
485
744
20
4
21,931
75
1,200

100

28
2,640
8
11,955
372
1,748
1
10
147
500
25
200
383
115
228
1,000
125
100
156
70
2
10
150
745
' 2,846
14,524

. 28
2,900
8
13,387
372
1,848
20
10
247
500
25

3,565
302
10
2,350
18,064
150
891
6,049
125
2,275

100

235
305
569
200
200
52
9,620
600
500

200
307
115

210
1,000
525

100
156
180
2
150
745
3,651
15,009

2
3,595
302
1
2,350
16,284
150
991
6,059

110
2,275

100

235
305
569

200
200
42
10,190
600
500
17,600
8,042
20
31

1,625

19,160
7,667
20
31
100
1,625

70
245
940

70
245
740

70
245
1,240

19,915
7,352
2
31

100

100
1,525

STOCK EXCHANGE PRACTICES

S tatistics in regard to short selling, Netc Y ork Stock) Exchange, on April 1,
5, and 6, 1982— Continued
Apr. 1

Skelly Oil C o ______________________ ______________________

Apr. 4

Apr. 5

Apr. 6

16,103
1,020
100
980
286
10
.524
33, 853
163
300
40
100
100
6, 193

15,406
970
100
1,295
366
50
399

15,170
620

13, 865
620

895
266
50
399

295
111
50
399

300
40

325
40

125
40

100
7,060

100
6,360

100
5,860

100
300
4,260
7,948
630
80
200
20
600
25

100
350
4,094
7,298
700
180
200
20
100
25

200
11, 334

200
10, 869

6,887
165
10
2,756
46,472
50
200
10
45
723
870
120
240
90
150
10
100
450
4, 518
1,483
200

6,657
215

100
350
3,844
7,633
700
180
200
20
100
25
15
200
8, 135
30
8, 177
140

100
350
4,144
7,993
700
180
200
20
100
75
15
200
7, 190
30
8. 052
240

2,591
46, 997
50

2,511
47, 754
50

2,121
47,475
50

Solvay American Investment Corporation, preferred with-

Spalding (A . O.) & Bros., first preferred____________________

Standard Gas & Electric C o ________________ . . . . ________
Standard Oil of California (Delaware)................ . - ________
'Starrett (The L. S.) C o ________ ___________________________

Sun Oil Co

______________ __________________________ ____

Texas Gulf Sulphur C o ................... ..............................................

100
100

10
255
1, 723
1,225
236
365
90
150
10
450
5,041
2,358
200

’ Stricken from the list Apr, 1, 1932.

10
1,898
1,295
151
345
90
150
10
10
450
4,612
2,363
200
60
200
100
10

100
100

100
100
10

100
216
10
390
100
20
6,630
10,125
500
125
100
850
34, 528
1,704
14,195
5,837

216
10
350
100

7,835
10,125
400
170
245
650
37, 332
1,704
14, 923
4,627

7,365
10,425
400
170
715
650
35,124
1,634
12,826
4,304

216
510
350
100
10
7,315
10, 525
1,500
320
715
550
33, 296
1,634
13,660
5,231

225
60
472
32,148
1,182
100
1,859

425
60
430
29,879 1
1,142 I
150
1,464 1

232
160
410
26,288
1,167
100
1,294

225
100
410
24,154
1,158
100
1,561

U nited Aircraft & Transport Corporation, preferred, with-

United Fruit C o................... ............ .............................. ................

10
1,698
1, 295
186
365
90
150
10
10
450
4,301
2,343
200

STOCK EXCHANGE PRACTICES
Statistics in regard to short selling, Neio Y ork Stock Exchange, on April 1,
5, and 6, 1932— Continued
Apr. 1
United Gas & Improvement C o____________________________
United Gas & Im provem ent Co., preferred_____ ___________
United States Foreign Securities Corporation______________
United States Gypsum C o_________________________________
United States Gypsum Co., preferred.____ ________________
United States Industrial Alcohol C oo______________________
United States Leather Co., voting trust certificates________
United States Leather Co., preferred, voting trust certificates
United States Leather Co., class A voting trust certificates..
United States Pipe & Foundry C o ____ ____ _______________
United States Realty & Improvement C o ______ ___________
United States Rubber C o__________ ______________ _______
United States Rubber Co., preferred_______________________
United States Smelting, Refining & M ining C o____________
United States Smelting, Refining & M ining Co., p ieferred...
United States Steel C orp ora tion ................................ ................
United States Steel Corporation, preferred............................ .
United Stores Corporation, class A ............. ............ ..................
United Stores Corporation, $6 preferred......................... .........
Universal Leaf Tobacco Co. (In c.)........................ ..................
Universal Pictures Co. (Inc.), preferred............... ............ ........
Utilities Power & Light Corporation, class A --------- ------- -----Vanadium Corporation of America----- --------------------------------Virginia-Carolina Chemical Corporation, 7 per cent pre
ferred________ i----------------------- ------------------------------------ ----Virginia-Carolina Chemical Corporation, 6 per cent pre
ferred______ _______ _________________ ____ ______________
Virginia Electric & Power, preferred_______________________
Vulcan Detinning C o _________________________ ____________
Wabash R y. C o------------------------ ------------------- ---------------- ----W aldorf System (In c.)______________ ____ __________ ______
W ard Baking Corporation, class B ........................... ................
Warner Bros Pictures (In c.)_______________________________
Warner Bros. Pictures (Inc.), preferred— -------- -----------------Warren Bros. C o___________________________________________
Wesson Oil & Snowdrift Co. (Inc.)--------- ------- --------------------W est Penn Electric Co., 6 per cent preferred_______________
W est Penn Electric Co., 7 per cent preferred______________
W est Penn Power Co., 7 per cent preferred-------------------------W est Penn Power Co., 6 per cent preferred.--------- -------------Western M aryland R y. C o_________________ _______________
Western Pacific Railroad Corporation, preferred........... ........
Western Union Telegraph C o -------------- ---------- --------------------Westinghouse Air Brake (The) C o _________________________
Westinghouse Electric & Manufacturing C o--------- ---------—
Westinghouse Electric & Manufacturing Co., preferred------W estvaco Chlorine Products C o ___________________________
Wheeling & Lake Erie R y. C o._____ ______________________
Wheeling Steel Corporation, preferred--------------------------------W hite M otor Co. (T h e)__________________ ____ ____________
W ilcox (H . F.) Oil & Gas C o ______________________________
Willys-Overland Co. (T h e )___________ _____ __________ —
W illys-Overland Co. (The), preferred_________ _______ ____
W ilson & Co. (In c.)_______________________ ____ ____ _______
W ilson & Co. (Inc.), preferred ..-------------------------------- -------W oolworth (F. W .) C o_____________________________ ______
W orthington Pum p & Machinery Corporation-------------------Worthington Pum p & M achinery Corporation, preferred B .
W rigley (W m .) Jr., Co. (Delaware)--------------------------------Yellow Truck & Coach Manufacturing Co., class B _____
Yellow Truck & Coach Manufacturing Co., preferred----Young (L. A .) Spring & Wire Corporation________ ______
Youngstown Sheet & Tube Co., unstipulated_____ ______
Zenith Radio Corporation_________________________ _____
N um ber of shares of total short interests_____________
Net change, plus or minus 3________________________________
Total number of stocks in which a short interest was re
p o r t e d ... . ______________________________________ _______ _

Apr. 4

17,629
10
100
315

15,305
110
100
290

2,266
50

400
1,292
163
540

2,301
150
100
10
310
500
1,452
763
450

386,422
13,805
14
352

363, 436
12,165
14
427

40
4,420
3,860

100

Apr. 5
22,115
110
100
290
10
1,825
150
100
10
320
900
1,432
163
750

25,094
110
100
190
"""I," 970
150
100
lO
670
2,975
1,472'
263
450'

100

45
14
70
225
735
100
2,280
50
100

650

40
3, 670
3, 650

364,260
12,122
14
677
90
40
3, 785
3, 512

"361,"698
13,352
39»
1,047
90
45
3, 810
4,822

70
225
635

25
70
300
635

200
5
80
225
710
100
2,880
50
100
710
34

825
2
32,346
1,652
139,800

625
2
30,623
1,652
126, 850

100

100
5
50
100
500
298
100
100
100
56,703

5
50
200
500
298
100
100
100
51,853
1,600

100

2,405
50
100,

625
12
29,563
1, 621
124, 665
10
100

5
50
100

500
298
100
100
100

54,963
1,010
50
1, 770
144
10

100

2,405
50
474
1,260

7
625
12
29,760
1,521
125,107
10
100
5
50
100
400
298
100
100

100

51,863
1,010
50
2,050
174
10

550
144

740
144

100
125

100

125
35

125

3, 279,398
-19,870

3,189, 596
-89,802

3,059,658
-129,938

3,063,927
+4,269

592
590
602
fl, 000,000
1,500,000 LI, 600,000 [l, 500,000
105,900 r 59,300 [ 89,300
N um ber of shares sold short and covered the same d ay------L 107,900
Per cent of short sales covered the same day to total trans |
7.06 r
5.93
5.95
actions___________________________________________________
L
6.74 [
147,284
144, 746
146.483
Total shares reported b y 3 odd-lot houses__________________
Total shares traded in on N ew York Stock Exchange---------

2 Num ber of shares of total short interest on Apr. 7, 2,849,895.
3 N et change, plus or minus, —214,032.

Apr. 6

2,100,000-

151, 553*

STOCK EXCHANGE PRACTICES

E x h ib it N o . 2 1, A p r il 2 1 , 1932
(See p. 236, this hearing)
•Ch a r t s S h o w i n g S h o r t I n t e r e s t i n A m e r i c a n a n d F o r e i g n

(See pp. 239, 240, this hearing)
----------------------------------------- ------------------------HUHKfi O f SHAMS SHMT

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SEPTEMBER

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EXCHANGE

C o m p a r is o n , L is t e d St o c k s — B a n k St o c k s
S t a n d a r d S t a t i s t i c s P r ic e In d e x * M o n t h l y A v e r a g e ; 4 2 1 In d u s t r i a l , R a i l a n d U t i l i t i e s S t o c k s . L is t e d
S t a n d a r d S t a t i s t i c s P r ic e In d e x > m o n t h l y A v e r a g e ; 2 0 N e w Yo r k B a n k S t o c k s . O v e r - t h e - C o u n t e r

STOCK EXCHANGE PRACTICES

E x h ib it N o . 23, A p r il 2 1, 1932
(Supplement thereto, see p. 263 of this hearing)
Items valued at $500,000 or over included in detail of “ shorts ” at November 12, 1928
Security

Adams Express____ ................................................................... - .......................
Allied Chemical & D ya Corporation......... - .........- ................- .......................

25,750
7,500
14.900
11.900
14.600
55,000
8,300
6.500
36.200
6,700
5,200
10,360
13.200
7.500
23.600
145,200
67,100
42.900
13.900
12,300
15,600
14,800
9.300
8.300
24,400
9,600
14,300
11,200
7,800
3,100
17,600
86,200
8,900

American & Foreign Power C o ...... .........................- ........................................
American Telephone & Telegraph C o.............. ...........................- ..................
Anaconda Copper Mining C o .......... - ..................... .........................................

D u Pont de Nemours & C o........................... ............ ........................................
General M otors........................................................................... - .....................

M ontgom ery W ard________________ _______ ____________ ______________-

Radio Corporation___________________ ______________________ - ................
Sears, R oebuck__________________________ ____ ____________- ....................
Texas Gulf Sulphur____ ________________________ ______________________
Union Pacific_________________ ______- _____ ____________________________
United States F reight........... ..................... .............. ....................... - ................

Price

759, 710

Value

$22
201
96
55
203
77
209
110
81
195
116
55
85
90
184
39
9
29
60
56
50
45
163
80
30
88
54
48
65
203
89
155
110

$566,500)
1.507.500
1,430,400
634,500
2,963,000
: 4,235,000
1,734, 700
715,000
2,932,200
1.306.500
603,200
569,800
1,122,000
675,000
4,342,400
5,662,800
603,900
1,244,100:
834.000
688,800
780.000
666.000
1,515,900
664.000
732.000
844,800
772,200
537,600
507.000
629,300
1,566,400
13,188,600
979.000
57, 774, lOO

C O M P A R IS O N

Total shares short as above, 1,691,883; total shares listed on exchange Novem
ber 1, 1,110,419,105 equals 0.001524 or VtsVit °f 1 Per cent.
Value of total shares short as abovej $89,611,115; total value of shares listed
on exchange November 1, $71,752,650,908, equals 0.001249 or tW& of 1 per cent.
Total short position at November 12, 1929, valued at $500,000 or over

Security

Adam s Express.......................................... .......
Allied Chemical & D y e Corporation...........
American Can...................................................
American & Foreign Power C o ___________
American Telephone & Telegraph C o.........
Anaconda Copper M ining C o .......................
Atchison, Topeka <fc Santa Fe R y ................
Baltimore & Ohio R . R __________________
Bethlehem Steel_____ ______- .........................
Canadian Pacific R y .......................................
Coca-Cola C o ____________________________
Columbia Gas & Electric Corporation____
Consolidated Gas C o......................................
D u Pont de Nemours & C o ...................... .
General E l e c t r i c .......................- ............ .......
General M otors__________________________
International Combustion Engineering___
International Nickel C o ..................................
International Telephone & Telegraph C o ..
Kennecott Copper C o ........ ............................
M ontgom ery W ard..........................................

Total
shares
short
25,750
7,500
14,900
11,900
14,600
55,000
8,300
6,500
36,200
6,700
5,200
10,360
13,200
7,500
23,600
145,200
67,100
42,900
13,900
12,300
15,600

Total shares
listed

1,200,000
2,178,109
2,473,998
1,611,008
13,209,176
8,811,666
2,416,828
2,529,221
3,197,540
3,000,000
1,000,000
8,477,591
11,454,951
10,322,481
7,211,484
43,500, 000
1,049,513
13,778,878
5,842,975
9,383,290
4,620, 768

Price

$22
201
96
55
203
77
209
110
81
195
116
55
85
90
184
39
9
29
60
56
50

Value of
total shares
short
$566,500
1,507,500
1,430,400
654,500
2,963,000
4,235,000
1,734,700
715,000
2,932,200
1,306,500
603,200
569,800
1,132,000
675,000
4,342,400
5,662,800
603,900
1,244,100
834,000
688,800
780,000

Value of total
shares listed

$26,400,000
437,799,909
237,503,808
88*605,440
2,681,462,728
678,498, 282
505,117,052
278, 214, 310
259,000,740
585,000,000
116,000,000
466,267,505.
973,670,835
929,023', 290
1,326,913,056
1,696, 500,000
9,445,61T
399,587,462
350,578,500
525,464,240
231,038,400

STOCK EXCHANGE PRACTICES

Total short position at November 12, 1929, valued at $500,000 or over— Contd.
Total
shares
short

Security

National Dairy Products_____ ___________
N ew York Central R. R __________________
Pennsylvania R . R ___________ __________
Radio Corporation____ __________________
Sears, R oebu ck... _______________________
Standard Oil of New Jersey_______________
Texas Gulf Sulphur _____________ _______
Union Carbide & Carbon_________________
Union Pacific.____ _________ _____________
United States Freight____________________
United States Steel. ____________________
Westinghouse Electric____ _
___________

Total shares
listed

14,800
9,300
8,300
24,400
9,600
14,300
11,200
7,800
3,100
17,600
86,200
8,900

5, 094,659
4, 637,086
11, 438,750
6, 577,515
4, 589,908
24, 853, 643
2, 540,000
9, 203, 266
2, 222, 916
299,708
8, 131,100
2, 589, 265

759, 710

234,447,293

Price

$45
163
80
30
88
54
48
65
203
89
153
110

Value of
total shares
short

Value of total
shares listed

$666,000
1,515,900
664,000
732,000
844,800
772, 200
537,600
507,000
629,300
1, 566,400
13,188,600
979,000

$229, 259,655
755,845,018
915,100,000
197, 325,450
403,911,904
1,342,096,722
121,920,000
598, 212, 290
451, 251,948
26, 674,012
1, 244,058, 300
284,819,150

57, 774,100

19,372, 565, 623

C O M P A R IS O N

Total shares short as above, 759,710; total shares listed as above, 234,447,293
equals 0.00324 or 32%ooo of 1 per cent.
Value of total shares short as above, 57,774,100; value of total shares listed as
above, 19,372,565,523 equals 0.00298 or 29S/iooo of 1 per cent.
Shorts November 12, 1929
Security
A bitibi Power & Paper C o __________________________________ _______
Adam s Express C o .. . __________________ _____ ________________ ___
Ahumada Lead C o . . ___

___ _____________ __________ ________ ___

Ajax Rubber C o .. ........... ......... ............................ ........... ........................
Alaska Juneau Gold M ining C o . . _____ ______________ ______________
A lbany W rappping Paper C o ........ ...................................... ........ .............
Alleghany Corporation__________ _____ _________ ______ ____ _______
Alleghany Corporation, preferred................................................................

Alpha Portland Cement__________ ____ _______________ ____ ____ ___
Amerada Corporation______________________ ____ __________ ____ ___
American Agricultural Chemical C o _____________________ _____ ______
American Bank N ote C o ____ . . .

_______ ____ ____ ______ _________

American Brake Shoe & Foundry............ ............ .................... ..................

American Can Co., preferred...... .......... .......... .......... ..............................
American Car & Foundry C o .......... ..................... ............................ ..........
American Commercial A lcohol......................................................................
American Express C o ............ .................... .................................................

American Hawaiian Steamship_____________ ________________________

American Piano C o.. Dreferred.. .

........... ...................................... ..........

Shares
600
100
25,750
500
900
400
4,300
200
400
1,300
6,000
1,000
7,500
100
500
200
300
1,800
200
400
100
100
200
1,000
2,000
100
400
14,900
200
100
100
400
500
600
11,900
800
200
2,200
1,400
100
3,400
300
1,200
100
200
200
100

Price
$39
70
22
12
18
7/k
80
2
4
10
20
95
201
120
38
28
20
5
23
80
63
9
29
43
7
60
30
96
136
75
114
20
22
205
55
89
28
20
44
31
30
3
92
111
39
3
17

Value
$23,400
7.000
566,500
6.000
16,200
350
344,000
400
1,600
13.000
120,000
95.000
1, 507, 500
12,000
19.000
5.600
6,000
9,000
4.600
32.000
6,300
900
5,800
43.000
14.000
6,000
12.000
1,430,400
27,200
7,500
11,400
8,000
11,000
123,000
654,500
71,200
5,600
44,000
61,600
3,100
102,000
900
100,400
11,100
7,800
600
i,7 oa

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929— Continued
Security

American Power & Light C o ------- ------- ------- ----------American Power & Light Co., A .......... ..................... .
American Radiator & Standard Sanitary__________
American Radiator & Standard Sanitary, preferred
American Rolling M ill C o............... ................... .........
American Safety Razor Corporation---------- ------------American Seating C o______________________ _____
American Ship & Commerce Corporation.................
American Smelting & Refining C o .......................... American Snuff C o----------- ------------------ ------- - ...........
American Steel Foundries C o _____________________
American Stores.---------------------- ----------------------------American Sugar Refining Co........................................
American Sugar Refining C o., preferred................. .
American Telephone & Telegraph C o.............. .........
American Tobacco C o ----------------- -------------------------American Tobacco Co., B __________________ _____
American T yp e Founders_______________ . . . ____ American Water Works & Electric C o ------------------American Water W orks & Electric C o., preferred...
American W oolen C o_____________________________
American W oolen C o., preferred__________________
American Writing Paper C o -------------------- ---------American Zinc, Lead & Smelting C o --------------------American Zinc, Lead & Smelting Co., preferred___
Anaconda Copper M ining C o ____________________
Anchor Cap Corporation______________ ____ ______
Anchor Cap Corporation, preferred----------------------Andes Copper M ining C o . . . --------------------------------Archer Daniels M idlan d ....................... .......................
Armour & Co., A _________________________________
Armour & Co., B _________________________________
Arm our & Co., preferred---------- --------------------- ------Arnold Constable C orp ora tion .._________________
Artloom C orp oration ........ ..........................................
Art M etal Construction C o........................... ..............
Associated Apparel...... .......... ............................... .......
Associated D ry Goods Corporation........................
Atchison, Topeka & Santa Fe R y -------------------------Atchison, Topeka & Santa Fe R y ., preferred_____
Atlantic Coast Line R . R . ------- ----------------------------Atlantic Gulf & West Indies Steamship___________
Atlantic G ulf & West Indies Steamship, preferred.
Atlantic Refining C o ...... ....................... .......................
Atlas Powder C o _____________ ___________________
Auburn M otors...............................................................
Austin Nichols & C o ........ —_____ ________________
A u to Strop Safety Razor Co-------------------------- ------Aviation Corporation_______________ ______ ______
Baldwin Locom otive...... .............................................
Baltimore & Ohr6 R . R . _________________________
Barnsdall Corporation, A __________ _______________
Beacon O il........ ................................... .......... ................
Belding-Heminway C o ____ ______________________
Bendix A viation..........................................................
Best & C o........................... ........................... .......... .
Bethlehem Steel............................................... ..............
Behtlehem Steel, preferred...........................................
Bloomingdale Bros......................... .............................
B on A m i C o...................................... ..............................
Booth Fisheries C o___ ____ ____________________ _
Borden C o .____________ _____________ ______ ____
Borg W arner________ _______________ _____________
Briggs Manufacturing C o ____ ____________________
Briggs & Stratton___ _____ ________ _____________
British Empire Steel_____________________________
B rockw ay M otor Truck Corporation_____________
Brooklyn-Manhattan Transit Corporation..........
B rooklyn & Queens Transit______________________
B rooklyn U nion Gas___________________ _________
Brown She C o__________________________ _________
BrunswickBalke-Collender C o____________________
Bucyrus ErieCo., preferred........ .................................
Bucyrus E rie.. I . . : '. ______ _______________ _______
B udd, E .G ., M anufacturing_____________________
Bullard C o _______________________________ ____ _
Burns, Bros., A ______ ________________________ _
Burns Bros., B ___________________________________
Burns Bros., preferred______________ ____ ________
Burroughs A dding Machine C o __________________
Bush Terminal C o _________________ ____ ________
B utte Copper & Zinc C o . . ........................... ..............

Value

Shares
700

200
3.400
100
600
100
700
100
2,000
500
800
200
1.400
100
14,600
800
2,100
200
400
900
5.900
1.900
100
100
100

55,000
2.300
400
500
100
1,700
500
600
500
100
200
1,600
400
8.300
100
500
700
100
8,000
1.300
500
500
300
2,800
2,800
6.500
2,600
100
500
5.900
500
36,200
200
100
200
100
300
4.500
2,000
100
400
500
300
300
200
3,200
100
800
200
200
300
100
200
50
2,800
100
1,100

$65
70
30
130
75
51
22
1
66
40
40
43
58
100
203
178
178
123
52
100
8
20
5
7
55
77
35
102
33
25
6
3
62
8
20
24
37
28
209
100
165
66
55
38
80
137
4
35
6
22

110

22
17
6
29
31
81

120
25
71
4
59
30
11
25
2
15
49
8
103
41
20
112
20
10
30
91
25
90
39
34
4

$45,500
14.000
102,000
13.000
45.000
5.100
15,400
100
132.000
20.000

32.000
8,600
81,200
10.000
2, 963, 800
142, 400
369,600
24.600
20,800
90.000
39.200
38.000
500
700
5.500
4, 235, 000
80.500
40.800
16.500
2.500
10.200
1.500
37.200
4.000
2.000
4,800
59.200
11.200
1, 734, 700

10.000

82.500
46.200
5.500
304.000
104.000
68.500
2,000
10.500
16.800
61.600
715.000
57.200
1,700
3.000
171,100
15.500
2,932,200
24.000
2.500
14.200
400
17.700
135.000
22.000
2.500
800
7.500
14.700
2.400
20,600
131.200
2.000
89,600
4.000
2.000

9.000
9.100
5.000
4, 500
109.200
3.400
4.400

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929— Continued
Security

Canadian Pacific R y _____________________________ ____________ —

Case Threshing M achine------------------------------------------------------------------Oerro de Pasco Copper Corporation___________________________

____

Chicago Great Western_________________ _____ ____________________
Chicago, Milwaukee, St. Paul & Pacific R. R ., preferred________

...

Childs C o ___________________________________________________________

C olum bia Gas & Electric Corporation, preferred_____ _______________

Dom e M ines______ ___________________________

. . . - ______________

100
800
500
300
800
800
100
400
6,700
300
300
200
300
100
1,190
900
500
7,600
500
800
1,200
100
700
200
5,400
1,800
1,500
1,400
700
1, 700
100
200
300
200
11,100
200
4,300
100
5,200
600
600
10,360
300
100
3,700
200
450
2,500
5,600
28,900
300
2,300
100
400
200
13,200
600
1,200
100
620
900
4,800
600
10,400
9.200
3.200
100
1,000
200
100
100
300
1,300
200
1,600
200
600
100
23,900
1,685
3.000
1.000

Price
$6
52
69
1
80
30
22
55
195
31
21
79
130
35
35
59
12
33
42
173
4
4
8
24
19
31
8
26
48
108
97
103
48
65
30
43
38
37
116
12
30
55
102
68
19
115
23
34
22
12
42
12
47
11
18
85
96
1
10
35
5
47
48
8
22
80
138
24
10
20
40
18
80
8
1
2
7
110
9
26
150
7

Value
$600
41,600
34,500
300
64.000
24.000
2,200
22.000
1, 306, 500
9.300
6.300
15,800
39.000
3,500
41,650
53,100
6,000
230,800
21.000
138,400
4,800
400
5,600
4,800
102,600
55,800
12,000
36,400
33,600
183,600
9,700
20,600
14,400
13,000
333,000
8,600
163,400
3,700
603,200
7,200
18,000
569,800
30,600
6,800
70,300
23,000
10,350
85,000
123,200
346,800
12,600
27,600
4,700
4,400
3,600
1,122, 000
57,600
1,200
1.000
21,700
4,500
225,600
28,800
83,200
202,400
256,000
13,800
24,000
2,000
2,000
4,000
5,400
104,000
1,600
1,600
400
4,200
11,000
215,100
43,810
450,000
7,000

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929■
— Continued
Security

Drug (I n c ,''... ______
_______ _____________________ ______________
Dunhill International. ______ - _______ ____ ___________ ____________
D u Pont de Nemours & C o ___________________ . . .
______________
Duquesne Light C o __ ____ _________________________________________
Eastern Rolling M ills____________ ______ _____________________ ______
.
... ...
Eastman Kodak C o ___ ____ ________. . . . . . .
Eitingon Schild C o__________________________________ ________________
Electric Powef <fe Light Corporation__________________________ _______
Electric Power & Light, preferred..................... ...........................................
Endicott-J ohnson__________________________________________ _______. .
Engineers Public Service C o_________ ________ . . _____________________
Engineers Public Service 5 per cent preferred_____________ ___________
Equitable Office Building Corporation_______ ______ ________________
Erie R. R ________________ _______ ____________ ____ _________________
Erie first preferred____________ ______ ___________ ____________________
Enrfiku Vafflinm C,l«anftr Co
Evans A uto Loading C o________________________ ______ ______________
Fairbanks, Morse & Co ___________________ ______ _______ _______
Fairbanks, Morse, preferred_________________________________________
Federal Light & Traction.................. _........ .............. ............ __................
Federal M ining & Smelting, preferred_______ _____ __________________
Federal M otor Truck C o _____ _______________________________________
Federal Water Service, A ___________ ______________ _________________
Fidelity Phenix Fire Insurance C o _______ ______. _____ ____________ _
Filene’s Sons C o............ . ............................................... ................................
First National Stores____ ______ __________________ . . ____ ___________
Fisk Tire & R ubber____ _______ __________ _________________________
Fox Film C orp ora tion ..._______________ _________ ___________________
Gabriel Snubber Manufacturing C o ______ ___________________________
General American Tank Car C orporation................. .............................
General Cable Corporation______ ___________________________________

General Motors, 7 per cent preferred....... .......................... ............. ...........
General Outdoor Advertising, certificates..................................................
General Railway Signal................................................. ............................
Gimbnl Bros
..
_ _ . _.................
Gimbel Bros., preferred............................ ..................................................
G obel (Adolph) (In c.)............. ......................................................................
Gold D ust......... ................................... ............................................................
Goodrich C o .............. ................................ ............... ........... ........................
Goodyear Tire & R ubber C o ___________ ______ ___________ _________
Goodyear Tire & Rubber C o., preferred_______ ___________ __________
Gotham Hosiery.............................. ............ ............ ..................... ... ..............
Graham-Paige M otors........... ................ .......... ...............................................
Granby Consolidated M ining....................... ..................... ......................
Grand (F . & W .) Stores_____ _________________________________ ______
Grand Union C o . . .............................................................. ............................
Granite C ity Steel........................... . . : ...................... ........................
Grant (W . T .) C o .................................................. ............. ...........................
Great Northern Iron Ore........ ................................. ............ .....................
Great Northern Iron Ore, preferred
......................................................
Great Western Sugar.............. ...........................................................
.
Greene Cananea Copper C o . . ...................................................................
Grigsby-Grunow..................... ,,_______ ___________________________ . . .
Guantanaino Sugar C o ................. ..................... ..................... ......................
G ulf States Steel C o............................................. ................... ....................
Hahn Department Stores___________ ________________ _____ _________
Hahn Department Stores, preferred___________________ _____________
Hartman Corporation, B _ __________ __________________ _______
Hayes B od y ............. ............................................ ..................................
Helme C o. (G . W .)_____ _______________________________ ____
Hershey Chocolate Corporation_____________________________________

Shares
3,000
300
7,500
200
400
1,400
900
100
3,900
200
1,100
300
300
700
1,700
100
300
5,500
1,800
200
1,100
100
100
100
100
2,000
300
1,100
200
7,850
500
200
100
1,400
700
1,400
700
1,100
100
2,800
23,600
2,200
3,300
300
1,800
100
1,400
100
145,200
100
600
1.700
1,400
1.700
2,300
600
100
400
3,100
2,400
1,600
1,800
100
1,200
900
500
500
900
500
800
3.200
2.200
600
100
17,700
900
200
850
200
1,400
200
200
1,700

Price
$75
35
90
98
23
158
27
13
67
4
34
103
78
51
37
86
37
45
57
38
18
35
103
60
98
7
30
61
39
52
4
35
15
61
26
6
4
85
120
29
184
11
43
95
69
50
55
88
39
117
18
25
74
57
85
12
75
29
10
35
43
65
93
17
9
52
42
11
37
45
22
90
31
117
17
2
49
13
78
15
8
86
60

Value
$225,000
10, 500
675,000!
19,600
9,200
221,200
24,300
1.300
261,300
800
37.400
30.200
23.400
35.700
62.900
8,600
11,100
247,500
102,600
7.600
19.800
3.500
10,300
6,000
9.800
14.000
9.000
67,100
7.800
408.200
2.000
7.000
1.500
85.400
18.200
8,400
2.800
93.500
12.000
81,200
4,342,400
24,200
141.900
28.500
124.200
5.000
77.000
8,800
5,662,800
11.700
10.800
42.500
103,600
96.900
195, 500
7.200
7.500
11.600
31.000
84.000
68,800
117.000
9.300
20.400
8,100
26.000
21,000
9,900
18.500
36.000
70.400
198.000
18,600
11.700
300.900
1,800
9,800
11, 050
15,600
21.000
1,600
17.200
102, 000

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929— Continued
Security
Hershey Chocolate Corporation, preferred_______
H oe (R .) & C o., A ______________________ ______..
Holland Furnace C o____ _______________________
Houdaille-Hershey, B ___________________________
Household Products (In c.)______________________
Houston Oil C o . . _______ ________________ ______
Howe Sound C o ____________________ ____ _______
Hudson & Manhattan R . R _____________________
Hudson M otor Car Corporation_________________
H upp M otor Car Corporation_____________ ____
Illinois Central R . R _____________________ ______
Independent Oil & Gas C o _____________________
Indian M otocycle C o____________________________
Indian Refining C o .____ _______________ ________
Industrial Rayon Corporation__________ ____ _
Ingersoll-Rand C o_______________________________
Inland Steel C o ___ _____________________________
Inspiration C opper______________________________
Interboro Rapid Transit, preferred______________
Intercontinental R ubber C o _______________ ____
International Agriculture Corporation____ ____
International Agriculture preferred______________
International Business M achine_________________
International Cement Corporation______________
International Combustion Engineering__________
International Combustion Engineering, preferred
International Harvester_________________________
International Harvester, preferred_____ _________
International H ydro Electric____________________
International Match, preferred__________________
International Mercantile Marine C o ..___________
International Mercantile Marine certificates-------International Nickel C o __________ ______ _______
International Paper______________________ ____
International Paper & Power, A _________________
International Paper & Power, B . . . ............. ............
International Paper & Power, C ___________ _____
International Paper & Power, preferred--------------International Railways Central America.........—
International Shoe--------------------------- ------------------International Telephone & Telegraph___________
Interstate Department Stores. . ........................ ......
Investors E qu ity________________________________
Island Creek Coal C o . .......... ...................... .............
Jewel Tea C o____________________________________
Johns-M anville Corporation-------------------------------Jordan M otor Car C o___________________________
Kansas C ity Southern R ailw ay_________________
Kayser & Co. (Julius)---------------------------------------- Kelly-Springfleld Tire C o___________ ___________
Kelsey-Hayes Wheel Corporation_______________
Kelvinator Corporation_________________________
Kennecott Copper Corporation__________________
Kim berly-Clark____________ ____ ________ ______
Kolster Radio Corporation_______________ ____ _
Kraft-Phenix Cheese Corporation_______________
Kresge (S. S.) C o________________________________
Kresge Department Stores______________________
Kress & Co. (S. H .)_____________________ _______
Kreuger & Toll C o ------------------ --------------------------Kroger Grocery & Baking C o___________________
Lago Oil & Transport Corporation______________
Lam bert C o ________________ ____ ________ _______
Lehigh Valley R . R _____________________________
L ehigh Portland Cement C o ____________ ______ _
Lehigh Valley Coal_____________________________
L ib b y Owens___________________________________
Liggett & Myers Tobacco..........................................
Liggett & M yers Tobacco, B ------------------------------Lim a Locom otive W orks------------------------------------L iquid Carbonic Corporation___________________
L oew ’s (Inc.)____________________________________
Loft (In c.)_____________________ ________________
Loose-Wiles Biscuit Co__________________________
Lorillard C o_____________________________________
Louisiana Oil Refining Corporation_____________
Louisville Gas & Electric, A ....................................
Louisville & Nashville__________________________
Ludlum Steel--------------------- --------------------------------M cCall Corporation_____________________________
M cC rory Stores, B ____________ _______ _________
JVIcCrory Stores____________________ ________ ___
M cG raw -H ill Publishing................. ................... ......

hares
1,400
100
700
1,600
200
600
400
300
10,565
13, 763
100
800
400
2,800
700
400
400
1,000
100
200
200
200
500
500
67,100
1,000
2,800
100
2,300
400
700
1,200
42, 900
400
700
800
1,800
500
600
400
13,900
3,400
2, 700
500
400
1,800
400
600
500
1,600
400
4,100
12, 300
100
4,700
1,700
14, 500
100
300
3, 700
2,100
200
1,700
700
200
1,700
100
800
2,200
300
300
600
800
100
1,300
600
300
100
100
790
1,100
300
100

Price
$71
16
22
17
52
34
35
43
43
20
120
22
6
17
75
134
75
26
17
5
4
49
112
52
9
32
69
138
29
55
20
20
2^
50
26
18
11
80
30
58
60
29
21
40
41
93
2
69
32
4
21
6
56
49
7
28
30
11
57
24
44
16
92
68
33
15
20
84
88
28
43
40
5
43
15
8
32
120
30
73
85
85
33

Value
$99,400
1,600
15,400
27,200
10,400
20,400
14,000
12,900
454,295
275,260
12,000
17,600
2,400
47,600
52,500
53,600
30,000
26,000
1, 700
1,000
800
9,800
56,000
26,000
603, 900
32,000
193,200
13, 800
66, 700
22,000
14,000
24,000
1, 244,100
20,000
18,200
14,400
19,800
40,000
18,000
23,200
834,000
98,600
56, 700
20,000
16,400
167,400
800
41,400
16,000
6,400
8,400
24,600
688,800
4,900
32,900
47,600
435,000
1,100
17,100
88,800
92,400
3,200
156,400
47,600
6,600
25,500
2,000
67,200
193,600
8,400
12,900
24,000
4,000
4,300
19,500
4,800
9,600
12,000
3,000
51,100
93,500
25,500
3,300

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929— Continued
Security

M cKeesport T in Plate............. .....................................- ...............................
McKesson & Robbins, preferred......... ................. .................... ..................
M cLellan Stores......................................................................... ................ . .
M ack Truck__________________________ ______________ _______________
M acy (R . H.) & C o ........ ............ ................................... - ................ ..............
M andel Bros___________________ ____ _______ ___________ ____________
Maracaibo Oil Exploration C o ............ - ............ - _______________________
Marlin-Rockwell Corporation........ .............. ........ ......................................
Marm on M otor Car C o____________ - ................................................. .......
Mathieson Alkali W orks___________ ______________ __________________
M a y Department Stores______________ ___________ ___________________
M aytag C o............................................................................ .............................
M aytag Co., preferred_________ ___________________ __________ _______
Mexican Seaboard Oil________________ ______ ________________________
M id-Continent Petroleum...........................—_____ __________ _________
M iddle States Oil__________________________________ ________________
Minneapolis M oline_______ _________ _________ _____________________
Minneapolis
fit, T,nnis R. R
Missouri, Kansas & Texas__________ ____ __________________ _______
Missouri, Kansas & Texas, preferred.........- .................................................
Missouri Pacific R . R ____ ____ _________________ ____________________
Missouri Pacific R . R ., preferred_________ ____ - _____________________
M ohaw k Carpet M ills______________ ____________ - ..................... ...........
M onsanto Chemical.....................- ................ - .........- ......................... ............
M ontgom ery W ard.......................................................... ................................
M oon M otor Car C o ............................................................................ ..........
M otherlode_____ _____ _______________________________________________
M otor Wheel C orporation............................... - ...........................................
M otor M eter C o........................... .................................................... ................
Munsingwear (In c.).................................................... ...................................
Nash Motors C o.................. ............................................................................

N ewton Steel.................................. ........................................ ............ ..........

New York, New Haven & Hartford, preferred--......... .......... ............ .....
North American C o ______ ____________________________ _____________

Northern Pacific.............. ........................................................... .....................
Northern Pacific, certificates of deposit.......... .............................................

Otis Elevator______ ______ ________________________ __________________
Outlet C o______________ ________________________ ___________________

Pacific Telephone & Telegraph..................... - ......................... ................ .
Packard M otor Car C o............... ............ ..... ....................................... ...........
Pan-American Petroleum & Transportation C o....... . _______ ______ _

Shares
700
300
100
200
200
1,600
500
400
200
1,100
200
200
600
1,200
400
200
2,600
800
200
700
2,100
600
300
5,400
100
1,200
1,200
300
200
15,600
300
500
10,300
400
2,200
100
1,100
100
6,600
500
600
500
1,600
200
3,800
14,800
800
300
800
400
4,400
300
1,100
200
3,400
200
600
9,300
700
100
3,000
800
400
4,400
100
100
1,200
1,700
100
100
1,500
300
100
900
100
100
400
100
1,800
800
100
11, 500
5,100

Price
$55
33
45
25
64
120
12
20
8
30
23
3
34
54
12
30
13
27
30
25
1
14
1
30
99
54
115
40
55
50
%
56
1
26
6
40
18
37
47
16
16
14
149
141
61
45
26
91
37
130
25
5
1
35
26
40
38
163
124
82
98
119
11
79
50
98
47
80
80
4
14
75
3
200
30
60
45
15
49
63
145
15
57

Value
$38,500
9.900
4.600
5.000
12,800
192.000
6.000
8,000
1,600>
33.000
4.600
600
20,400
64.800
4.800
6,000
33.800
21,600
6,000
17.500

2,100

8.400
300
162.000
9.900
64.800
138.000
12.000
11,000
760.000
600
28,000
10, 300*
10.400
13.200
4.000
19.800
3,700
310, 200
8,000)
9,600.
7.000
238,400
28,200231,800’
666.000
20.800
27, 300
29, 600;
52.000
110,000
1, 500
1,100
7.000
88.400
8.000
'22,800
1,515,900
86,800

8,200
294.000
95.200
4,400
347,600
5.000
9.800
56.400
136,000'
8.000
400
21.000
22.500
300
180.000
3.000
6.000
18,000
1,500
88.200
50.400
14.500
172,500
290,700

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929— Continued
Security
Panhandle Products, preferred____________ _____ _
Paramount Famous Players_____________________
Park & Tilford__________________________________
Park Utah Consolidated M ines__________________
Pathe Exchange_________________________________
Patino M ines_______________ ____ ________________
Peerless M otors_________________________________
Penick & F o r d . . . -------- --------------------------------------Penney, J. C ____________________________________
Pennsylvania R . R ______________________________
Peoples Gas--------------------------------------------------------Pere Marquett R . R ---------------------- --------------------Pet M i l k ..____ __________________________________
Phelps & D odge_________________________________
Phoenix Hosiery_________________________________
Philadelphia Co., preferred______________________
Philadelphia & Reading Coal & Iron------------------Philip Morris & C o------------------------------ --------------Phillips Petroleum______________________________
Pierce Arrow M otor C ar_______________________ _
Pierce Arrow M otorC ar, preferred..,------------------Pierce Oil_______________________________________
Pierce Oil, preferred_____________________________
Pierce Petroleum________________________________
Pillsbury Flour M ills____________________________
Pirelli C o________________________________________
Pittsburgh Coal C o ______________________________
Pittsburgh Coal Co., preferred___________________
Porto Rican-American Tobacco, A . . .......................
Prairie Oil & Gas________________________________
Prairie Pipe Line________________________________
Pressed Steel Car--------------- ------- -------------------------Proctor & Gamble_______________________________
Producers & Refiners Corporation_______________
P ublic Service of N ew J e rs e y ..._________________
Public Service of N ew Jersey, preferred 6 per cent
Public Service of N ew Jersey, preferred 8 per cent
Pullman (In c.)__________________________________
Punta Alegre Sugar______________________________
Pure Oil C o_____________________________________
P urity Bakeries_________________________________
Radio Corporation------- ---------------------------------------R adio Corporation, preferred A _________________
Radio Corporation, preferred B _________________
Radio-Keith-Orpheum __________________________
Railway & Express______________________________
Rand M ines_____________________________________
Raybestos_______________________________________
Reading C o_____________________________________
Reading Co., second, preferred___________________
Real Silk Hosiery M ills__________________________
Remington Rand________________________________
Remington Rand, first preferred-------------------------Reo M otors_____________________________________
R epublic Brass__________________________________
R epublic Iron & Steel-----------------------------------------R eynolds Springs________________________________
R eynolds Springs A _____________________________
R . J. Reynolds Tobacco B _______________________
Richfield Oil_____________________________________
R io Grande O il____ ___________________________ _
Ritter Dental_____________________________ ____ _
Rossia Insurance---------- ---------------------------------------R oyal Baking Powder C o__________________ ____
R oyal D u tch ____________________________________
Safeway Stores____ ______________________________
St. Joe Lead_____________________________________
St. Louis-San Francisco__________________________
St. Louis-San Francisco, 6 per cent preferred____
St. Louis South W est____________________________
Schulte Retail Stores____________________________
Seaboard Air Line_______________________________
Seaboard Air Line, preferred-------------------------------Seagrave Corporation____________________________
Sears, R oebuck________________ __________________
Second National Investors_______________________
Seneca Copper___________________________________
Servel (Inc.)_____________________________________
Sharon Steel_____________________________________
Sharpe & D oh m _________________________________
Sharpe & Dohm , preferred____ __________________
Shattuck________________________________________

bares
200
2,600
200
1,200
2,600
1,500
2,600
100
700
8,300
1,600
100
100
300
100
100
700
1,100
2,400
3, 300
100
200
100
300
100
200
200
300
200
900
500
300
2,300
100
4,100
100
100
1,100
1,300
2,600
900
24,400
100
200
5, 600
200
100
600
2,300
100
200
2,600
200
4,100
300
800
1,000
200
3,400
1,100
400
200
900
100
5,900
400
1,100
800
300
2,500
1,600
6, 700
400
100
9,600
750
700
1,400
200
300
300
800

Price
$4
45
28
3
4
27
6
25
78
80
234
150
21
37
14
50
11
7
29
19
70
1
25
2
34
48
55
91
55
46
55
7
50
6
58
100
141
78
9
20
60
30
51
67
15
26
25
17
515
46
45
27
86
11
11
70
4
75
50
29
20
45
33
26
50
90
42
107
89
60
9
11
23
M
68
15
3
8
27
20
50
34

Value
$800
117,000
5,600
3,600
10,400
40,500
15,600
2,500
54,600
664,000
374,400
15,000
2,100
11,100
1,400
5,000
7,700
7,700
69,600
62,700
7,000
200
2,500
600
3,400
9,600
11,000
27,300
11,000
41,400
27,500
2,100
115,000
600
237,800
10,000
14,100
85,800
11,700
52,000
54,000
732,000
5,100
13,400
84,000
5,200
2,500
10,200
264,500
4,600
9,000
70,200
17,200
45,100
3,300
56,000
4,000
15,000
170,000
31,900
8,000
9,000
29,700
2,600
295,000
36,000
46,200
85,600
26, 700
150,000
14,400
73,700
9,200
1,100
844,800
11, 250
2,100
11, ?00
5,400
6,000
15, 000
27, 200

STOCK EXCHANGE PRACTICES
Shorts November 12, 1929— Continued
Security

Shell Union Oil....... . . . - ..................... - ..................... . ....................... ..........Shubert T h ea tre............................................. ............ ....................... ............
Simmons C o ................ ...................................... .......... .............................. .
Sinclair Consolidated Oil_______________ _______ ________ ____________
Standard Oil N ew Jersey____ ___________________ ____________________
Skelly O i l . . ................. ............................ ..................................... .......... .........
Southern California-Edison_________________________________ _________
Southern Pacific . . . . ______________ _______ _______ _______ ________
South Porto R ico Sugar......... ........................ ...................................... .......
Southern R y _____________________________________ ____ ______________
Spang C halfon t..____ __________ ______ __________ __________________
Sparks W ithington___ __________________________ ___________________
Spicer Manufacturing C o_________________ _______ ___________________
Spicer Manufacturing C o., preferred___ ________ _____________________
Spiegel M a y S te r n _____________________________ ____________________
Standard Brands___________________ ___________ ____ ________________
Standard Commercial T o b a c c o .._____ ______________________________
Standard Gas & E lectric...____ ______________________________________
Standard Oil N ew Jersey____________ ______________________________
Standard Oil New Y ork _________ _____________ ______________________
Starrett, L. S____________ ____ _____________________ _________________
Sterling Securities.. . ............. ... .........................
. . . _______________
Sterling Securities, preferred_____ _ _________________ ____ __________
Stewart Warner___________ _______ __________________________________
Studebaker C orp ora tion ______ _
___________ ___________ _______ _
Superior Steel_____ ______ _______________ ______ _____ _____________
Superior Oil___________________ _________ _____ _________ _____ ____
Symington Co. A ____ __________________________ _____________ _______
Telautograph...................... ........................................................ ................. .
Tennessee Copper & Chemical .............................................. ....................
Texas Corporation______ ________ ______________ ______________ _____
Texas Gulf Sulphur..... ................... ............ ............................ ............ ..........
Texas Pacific Coal & O il..............................................................................
T he Fair__ __ . . .
................................... . ............... .........................
Tidewater Oil............................................. ..................... ........... ...................
Tidewater A ss o cia tio n ._____ _________________ _______ _____ _______
Tidewater Asisociation, 6 per cent preferred______________ _____ _____
T obacco Products. ...... ..................... ............................ ...............................

Truscon Steel________________ ____ _________________________________

United States A lcoh ol..

.............................................................. ................

Shares
6,900
100
3,100
10,800
100
200
400
2,300
700
900
2,200
200
5,400
300
100
800
19,200
300
100
5,100
1,800
5,200
14,300
5,600
100
1,000
1,300
700
200
2,600
500
1,400
300
100
1, 400
6,300
11, 200
1,000
1,100
200
100
200
600
300
200
300
1, 600
2,700
10,100
6,000
14,800
300
900
100
1,100
7,800
1, 900
3,100
300
500
4,600
1, 500
100
8,200
8,100
400
9,800
200
200
300
300
600
9,700
500
100
100
17,600
200
400
200
2,300

Price
$21
17
61
25
54
30
15
52
112
25
123
20
15
21
40
45
25
115
9
80
70
60
54
32
35
11
13
38
73
42
16
6
3
16
11
51
48
119
9
7
17
29
18
11
78
15
70
4
6
2
6
17
35
28
125
65
45
203
80
134
37
35
10
6
3
40
23
44
6
14
21
100
25
95
21
96
89
22
9
16
10S

Value
$144,900
1,700
189,100
270.000
5,400
6,000
6,000
119.600
78,400
22.500
270.600
4.000
81,000
6,300
4.000
36,000
480.000
34.500
900
408,000
126,000
312,000
772,200
179,200
3,500
11,000
16,900
26, 600
14,600
109,200
8,000
8,400
900
1,600
15,400
321,300
537,600
119, 000
9, 900
1,400
1,700
5,800
10,800
3,300
15, 600
4,500
112,000
10,800
60, 600
12, 000
88,800
5,100
31,500
2,800
137,500
507,000
85,500
629, 300
24,000
67,000
170,200
52,500
1,000
49, 200
24, 300
16,000
225,400
8,800
1,200
4,200
6,300
60,000
242, 500
47,500
2,100
9,600
1, 566,400
4,400
3,600
3,200
248, 400

STOCK EXCHANGE PRACTICES

Shorts November 12, 1929—Continued
Security

United States R e a l t y _______

___ _____

___ ______________________

United States Smelters, Refining, preferred______ ____________ ______

Wabash R y ________ _________________________________ ____ ____ _____

Wheeling <fe Lake Erie______ ___________ __________________ _________

W orthington P um p____________________ ______ _________________
Yellow Tru ck___ _________________ . . _

....

.................... ........... _ ____

2,700
200
3,200
1,000
8,700
?, 200
500
700
86, 200
800
1.700
2.700
1,600
1,100
1,500
600
200
200
1,300
400
100
300
9,100
900
500
300
200
200
100
200
6,000
500
200
700
1,600
8,900
600
100
100
500
600
600
100
100
100
800
6,000
5, 400
3,500
100
500
2,000
100
500
1,100

Price
$15
15
4
55
25
47
35
48
153
139
7
28
4
47
36
5
86
84
22
24
5
18
35
18
6
25
53
90
39
13
15
18
44
162
40
110
28
100
100
26
28
9
35
13
36
16
9
58
51
75
68
9
107
36
15

1,691,883

Value
$40, 500
3,000
12,800
55,000
217, 500
103,400
17, 500
33,600
13,188,600
111,200
11,900
75,600
6,400
51,700
54,000
3,000
17,200
16,800
28,600
9,600
500
16,200
318,500
16,200
3,000
7,500
10,600
18,000
3,900
2,600
90,000
9,000
8,800
113,400
64,000
979,000
16,800
10,000
10,000
13,000
16,800
5,400
3,500
1,300
3,600
12,800
54,000
313,200
178, 500
7,500
34,000
18,000
10,700
18,000
16,500
89,611,115

E x h ib it N o. 24, A pril 21,1932
(See page 282, this hearing)
C o n s titu tio n o f t h e N ew Y o r k S to c k E x ch a n g e a s o f O cto b e r

28, 1931

[R u le s a d op ted b y th e g o v e rn in g com m ittee p u rsu a n t to th e c o n stitu tio n , w ith am end
m en ts to O ctob er 28. 1 9 3 1 ]
A r tic le

I.—Title—Objects

The title of this association shall be the “ New York Stock Exchange.”
Its objects shall be to furnish exchange room and other facilities for the con
venient transaction of their business by its members, to maintain high standards
of commercial honor and integrity among its members, and to promote and
inculcate just and equitable principles of trade and business.

STOCK EXCHANGE PRACTICES
A r tic le )

II.—Government

The government of the exchange shall be vested in a government committee,
composed of the president and the treasurer of the exchange, and of 40 mem
bers, elected in the manner hereinafter provided.
The members of the governing committee, the assistant to the president, the
secretary, the first assistant secretary, the accountant, and the economist shall
be the officers of the exchange.
A r tic le

III.—Governing committee

S e c t i o n 1. The elected members of the governing committee shall be divided
into four classes, each consisting of 10 members, one of which classes shall be
elected each year, to serve four years.
Sec. 2. The governing committee shall be vested with all powers necessary for
the government of the exchange, the regulation of the business conduct of its
members, and the promotion of its welfare, objects, and purposes.
In the exercise of its powefcs it may adopt such rules, issue such orders and
directions, and make such decisions as it may deem appropriate.
Seo. 3. The governing committee shall determine the manner and form by
which its proceedings shall be conducted; it shall appoint and may dissolve
all standing and other committees except the nominating committee, define,
alter, and regulate their jurisdiction as stated in this instrument and have
original and supervisory jurisdiction over any and all subjects and matters
referred to said committees, and may direct and control their actions or pro
ceedings at any stage thereof.
It may try charges against members of the exchange and punish such as may
be found guilty.
It shall have control of the property and finances of the exchange and fix
the fees and compensation to be paid to members of committees, to officers of
the exchange, and to the trustees of the gratuity fund.
It may appoint, dismiss, and determine the number, duty, and pay of em
ployees, and may delegate such powers to standing or special committees or
officers.
It may require that officers, appointees, or employees of the exchange give
good and sufficient bonds for the faithful performance of their duties.
Sec. 4. The governing committee may prescribe penalties for violation of
rules adopted pursuant to the constitution and for neglect or refusal to comply
with orders, directions, or decisions of the governing committee or of any stand
ing or special committee, and for other offenses against the exchange where
penalties are not specifically prescribed by the constitution.
Seo. 5. The governing committee shall prescribe rules for dealing on the
exchange. It shall prescribe rules as to contracts, the performance thereof,
default, and insolvency, which shall be applicable to exchange contracts, and
may extend or postpone the time for the performance of exchange contracts,
whenever in its opinion such action is called for by the public interest or by
just and equitable principles of trade.
It may adopt such rules as may be deemed necessary and proper in respect to
members’ contracts.
Seo. 6.1 The governing committee may admit to dealing upon the exchange,
securities, and also securities on a “ when issued ” basis, and may suspend
dealing therein, or may remove the same from the list.
Sec. 7. Whenever, in the opinion of the governing committee, a corner has
been created in a security listed on the exchange, or a single interest or group
has acquired such control o f a security so listed that the same can not be
obtained for delivery on existing contracts except at prices and on terms arbi
trarily dictated by such interest or group, the governing committee may post
pone the time for deliveries on exchange contracts therein, and may from time
to time further postpone such time or may postpone deliveries until further
action by the governing committee, and may at any time by resolution declare
that if such security is not delivered on any contract calling for delivery
thereof at or before the time to which delivery has been postponed or which lias
been fixed by the governing committee for such delivery, such contract shall
be settled by the payment to the party entitled to receive such security or by
the credit to such party of a fair settlement price, determined as hereinafter

1As amended June 28, 1928.

STOCK EXCHANGE PRACTICES

provided. If the parties to any cantract which is to be settled on the basis
of such fair settlement price do not agree with respect thereto, such fair set
tlement price and the date for the payment of the same may be fixed by the
governing committee. The governing committee before fixing the same shall
give the parties to the contract which is to be settled on the basis thereof an
opportunity to be heard either before the governing committee or before a
special committee appointed for the purpose. Any such special committee shall
report the testimony together with its conclusions thereon to the governing
committee, which may act upon such report without further hearing or, in its
discretion, may accord the parties a further hearing before acting thereon.
Sec. 8. The governing commitee, except as in this constitution otherwise
specifically provided, may consider and take action upon any matter at any
regular meeting or at any special meeting, even though the matter in question
is not specifically set forth in the notice for such meeting.
It may, by special resolution or standing rule, invite a person, not a member
thereof, to attend its meeting and to participate in its deliberations and to
serve on special and standing committees, to such extent as it may prescribe in
such resolution or rule, but without the right to vote at the governing com
mittee’s own meetings. Such invitation may at any time be recalled by the
governing committee or modified.
Sec. 9. A member of the governing committee who shall be absent from
three consecutive regular meetings without having been excused by the presi
dent may be declared by a two-thirds vote of the existing* members of the gov
erning committee to be no longer a member thereof.
Sec. 10. All vacancies occurring in the governing committee shall be filled by

said committee by election, the members so elected to serve until the next an
nual election. Before the governing committee fills a vacancy, a special com
mittee of its members, appointed for the purpose, shall confer with the nomi
nating committee and report to the governing committee.
Sec. 11. No member of the governing committee shall be disqualified from
participating in any meeting, action, or proceeding of any kind whatever of
said committee, by reason of being or having been a member of a standing
committee or special committee which has made prior inquiry, examination, or
investigation of the subject under consideration. Nor shall any member of
any standing or special committee be disqualified, by reason of such membership,
from acting as a member of the governing committee upon any appeal from a
decision of such standing or special committee. But no member shall partici
pate in the adjudication of any matter in which he is personally interested.
Sec. 12.2 Fifteen members of the governing committee shall be necessary to
constitute a quorum for the following purposes: (1) To admit to dealing upon
the exchange securities or securities on a “ when issued” basis; (2) to suspend
dealing in or to remove from the list any securities or securities on a “ when
issued" basis admitted to dealing upon the exchange; and (3) to extend or to
postpone the time for the performance of exchange contracts, whenever in the
opinion of the governing committee such action is called for by the public inter
est or by just and equitable principles of trade. For all other purposes a ma
jority of all the existing members of the governing committee shall be necessary
to constitute a quorum.
Sec. 13. Any hearing or trial may be adjourned from time to time, by the
governing committee in its discretion; but no member thereof, who shall not
have been present at every) meeting of said committee at which evidence is
taken, or at which an accused member, or a member whose conduct is involved
in the hearing, is heard, shall participate in the final decision.
Sec. 14. In the absence of both the president and vice president, any 10
members of the governing committee may call a meeting thereof.
Sec. 15. The governing committee shall at its first regular meeting in June
of each year designate counsel for the exchange, to be employed at the pleasure
o f said committee.
A rticle IV.—President
Sec. 1. The president shall be the principal executive officer of the exchange
and shall have the care of all its interests. He may preside at the meetings
of the exchange whenever he shall so elect, and shall be the presiding officer of
the governing committee.
EAs amended Sept. 19, 1929.

STOCK EXCHANGE PRACTICES

S e c . 2. The president may call special meetings of the exchange and of the
governing committee. He shall call special meetings of the exchange upon the
written request of 100 members, and special meetings of the governing com
mittee upon the written request of 10 members of said committee.
Sec. 3. Should special exigencies require, the president may appoint com
mittees ad interim, to act until the regular appointments are made.

A rticle V.—Vice President
S e c t i o n 1. The governing committee, at its first meeting after the annual
election of the exchange, shall choose from its members a vice president o f
the exchange.
S e c . 2. The vice president shall, in the absence of the president, assume all
the functions and powers, and discharge all the duties of the president.
S e c . 3.. In case of the temporary absence, or inability to act, of both the
president and vice president, the chairman of the law committee, the vice
chairman thereof, or the senior available member thereof in said order, shall
act in place of the president of the exchange.
A r tic le

V I . —Treasurer;

assistant treasurer; assistant to the president;
accountant; economist

S e c t i o n 1. It shall be the duty of the treasurer to receive, and, acting under
instructions from the finance committee, to take charge of and disburse, moneys
of the exchange. He shall report fully to the finance committee in regard
thereto at its stated meetings. He shall present to the governing committee
at its first regular meeting in January of each year a report of the finances of
the exchange for the 12 months ending December 31, preceding. He shall also
present to the governing committee at its first regular meeting in January,
April, July, and October a report of finances of the exchange for the three
months preceding. He shall be a member of the finance committee, and a
trustee of the gratuity fund; he shall pay over, semimonthly, to the treasurer
of the gratuity fund, all amounts collected under Article X X II of the
constitution.
Sec. 2. The governing committee, at its first meeting after the annual election
of the exchange, shall choose one of its members to act as assistant treasurer,
who shall, in the absence of the treasurer, assume all the functions and powers
and discharge all the duties of the treasurer.
Sejc. 3.3 The finance committee, at any meeting, may appoint one of its mem
bers to act, during the pleasure of the finance committee, as assistant treasurer
pro tempore, who shall, in the absence of the treasurer and assistant treasurer,
assume all the functions and powers and discharge all the duties of the
treasurer.
S e c . 4. The governing committee may, on the nomination of the president,
appoint an assistant to the president. He shall perform such duties as the
president may prescribe.
Sec. 5. The accountant and the economist shall be appointed by the govern
ing committee. They shall perform such duties as the governing committee
may prescribe.
A r t i c l e VII.—Secretary and assistant secretaries
S e c t i o n l . 4 The secretary shall be appointed by the governing committee. It
shall be his duty to record in a book of minutes the proceedings of the ex
change and take charge of its books and papers. He shall be the secretary
of the governing committee, and shall be the secretary of each standing and
special committee, unless another secretary to such committee has been duly
appointed. He shall conduct the correspondence of the exchange and of the
standing and special committees, except that any such committee may conduct
the correspondence relating to matters within its jurisdiction. He shall keep
a record containing the names of all the members with dates of their admission
and transfer of membership. He shall perform such other duties as the govern
ing committee may prescribe.
S e c . 2. The governing committee may appoint an assistant secretary, to be
known as the first assistant secretary, who shall assist the secretary in the

3As amended Sept. 29, 1927.

4 As amended July 26, 1928

STOCK EXCH AN GE PRACTICES

performance of his duties, and in the absence of the secretary shall discharge
all the duties of the secretary. He shall perform such other duties as the gov
erning committee may prescribe.
Sec. 3. The governing committee may also appoint additional assistant secre
taries who shall perform such duties as the governing committee may prescribe.
Sec. 4. In case of the temporary absence, or inability to act, of both the
secretary and the first assistant secretary, the governing committee may appoint
an acting secretary of the exchange.
A rticle VIII.—Elections
S e c t i o n l . 5 The annual election of the exchange shall be held on the second
Monday of May, unless postponed to a later date pursuant to the provisions of
section 3 hereof. At such annual election there shall be elected by ballot a
president and a treasurer, each for the term of one year, a trustee of the gratu
ity fund for the term of five years, and 10 members of the governing committee
for the term of four years; also members to fill any vacancies which may have
occurred during the preceding year either among the trustees of the gratuity
fund or in the governing committee.
Sec. 2.5 On the second Monday in January there shall be elected by ballot a
nominating committee to consist of five members (not officers of the exchange)
who shall serve for a period of one year. Any vacancy during said term shall
be filled by the remaining members. The nominating committee shall hold at
least three meetings in the month of March, due notice of which shall be posted
on the bulletin board, and sent to each member of the exchange, inviting mem
bers of the exchange to attend said meetings for the .purpose of suggesting
nominees for the offices and positions which are to be filled at the annual
election of the exchange. Said committee shall report to the exchange on the
second Monday in April nominees for such offices and positions.
The nominating committee shall also hold at least three meetings in the
month of November, due notice of which shall be psted on the bulletin board,
and sent to each member of the exchange, inviting members of the exchange
to attend said meetings for the purpose of suggesting nominees for the nomi
nating committee for the ensuing year. Said committee shall report to the
secretary of the exchange at or before 2 o’clock p. m. on the third Monday in
December nominations for a nominating committee to be balloted for at the
election on the second Monday in January.
Sec. 3.e Members may propose nominees by petition for the positions to be
filled at the elections prescribed by this article. Such a nominee must be in
dorsed by not less than 40 members of the exchange and no member shall
indorse more than one nominee: Provided, however, That 100 members may, by
petition, propose an entire ticket or any portion thereof. The petitions shall
l*e filed with the secretary of the exchange in sealed envelopes within two
weeks after the date fixed for the report of the nominating committee. The
nominating committee and the secretary of the exchange shall open said en
velopes and the names of all nominees for each office or position shall be ar
ranged alphabetically and shall be reported to the exchange on the following
day.
In case of the death, withdrawal, or disqualification at any time before an
annual election on the second Monday of May of a member proposed and re
ported to the exchange by the nominating committee as a nominee for one of
the offices or positions to be filled at such annual election, the nominatnig com
mittee shall within one week after the death, withdrawal, or disqualification
o f such member propose and report to the exchange another nominee for such
office or position, and the members may likewise propose by petition, in the
manner prescribed herein, a nominee or nominees for such office or position by
filing a petition with the secretary of the exchange within one week after the
nominating committee shall have so reported such other nominee, and the
annual election of the exchange shall be held two weeks after the date on
which the nominating committee shall report such other nominee to the ex
change or on the second Monday of May, whichever of said two dates shall
be the later.
The nominees receiving at an election the highest number of votes for the
positions to be filled shall be declared elected to those positions. In case of a

BAs amended Dec. 19, 1929.

STOCK EX CH A N G E PR A C TIC E S

tie, the names of the members involved shall be referred to the governing:
committee who shall make selection by a majority vote of its entire mem
bership.
Sec. 4. The nominating committee, in case of any vacancy in the governing
committee, shall confer with the special committee of the governing committeeappointed for the purpose of such conferences, and give such special committee
the benefit of its views in respect to the filling of the vacancy.
Sec. 5.5 If the exchange is not open for business on the second Monday in:

May, or on such later date to which the annual election may be postponed pur
suant to the provisions of section 3 hereof, or on the second Monday in Janu
ary, the annual election of the exchange or the election of the nominating;
committee, as the case may be, shall be held on the next succeeding business
day.
Sec. 6. Each member of the exchange, in good standing, present in person,,
shall be entitled to vote at any election or meeting of the exchange.
Sec. 7. When the exchange shall be assembled for the transaction of busi
ness other than dealing in securities, a majority of all the members shall con
stitute a quorum.
A rticle IX .—Eligibility to office; removal and vacancy;
Section 1. No person shall be eligible to the office of president, treasurer,,
trustee of the gratuity fund, or member of the governing committee, who shall
not be, at the time of his election, a member in good standing.
Seo. 2. The expulsion, suspension, insolvency or transfer of membership of a
member holding an office or position, which can be held only by a member of~
the exchange, shall create a vacancy therein.
Seo. 3. In the event of the refusal, failure, neglect or inability of an officer
elected by the membership of the exchange or a trustee of the gratuity fund, to
discharge the duties of his office, or for any good cause, of the sufficiency of'
which the governing committee shall be the sole judge, said committee shall
have power, by a two-thirds vote of all its existing members, to remove such,
officer and declare the position held by him to be vacant.
Seo. 4. In case a vacancy shall occur in the office of president or treasurer, the
same shall be filled by the governing committee for the unexpired term. '
Sec. 5. Every officer elected or appointed by the governing committee, and!
every other appointee, clerk or employee of the exchange shall hold his office,
place or position only during the pleasure of the authority by which he wasappointed; and he may be, at any time, removed, dismissed or discharged by
such authority or by the governing committee.

A rticle X .—Standing committees
Section 1. Promptly after the annual election of the exchange, the governing;
committee shall appoint from its members the following standing committees:
First. A committee on admissions, to consist of 15 members. All applica
tions for membership, and all applications of members suspended on account
of insolvency for reinstatement to their privileges shall be referred to this com
mittee; and said committee shall exercise the powers given it by Articles X II,„
XIII, XIV, and XVI hereof.
The affirmative vote of two-thirds of the entire committee shall be necessary
to elect to membership, or to reinstate a member suspended for insolvency.
No application for readmission of a person who has been expelled from the
exchange or declared ineligible for reinstatement or for the reinstatement of a
member who has been suspended under section 2 of Article XVI shall be con
sidered by this committee, unless such person has obtained the consent tosuch consideration of two-thirds of the members of the governing committeepresent at a regular or special meeting.
It shall be the duty of this committee to investigate every case of insolvency,
and ascertain the cause thereof as promptly as possible.
Second. An arbitration committee, to consist of nine members. All claims
and matters of difference arising from members’ contracts between members of
the exchange or firms registered thereon shall, at the instance of either party,
be submitted to the arbitration committee. Any claim or matter of difference
6 As amended Dec. 19, 1929.

STOCK E X CH A N G E PRACTICES

between a member of the exchange or a firm registered thereon, and a non
member, arising in the course of the business of such member or firm shall, at
the instance of the nonmember, be referred to said committee. The committee
may decline to hear or may dismiss any case and refer the parties to their
remedies at law, and it shall so refer them upon the joint request of the con
testants. The decision of the committee shall be final, unless an appeal be
taken by a member of the committee, or the case involves a sum of $2,500 or
over, and one of the parties appeals within 10 days to the governing com
mittee ; the appeal shall be submitted to the governing committee by the secre
tary of the exchange, upon a printed transcript of the record of the case, to
gether with such printed arguments as the parties to the appeal may desire to
make; and upon such appeal, the governing committee may finally adjudicate
the case, relegate the parties to their remedies at law, or direct a rehearing by
the arbitration committee or by a special committee. In case of a rehearing by
the arbitration committee or special committee, there shall be the same right
of appeal to the governing committee as in the first instance.
The arbitration committee, before considering any claim or matter of differ
ence at the instance of a nonmember, may require the nonmember to comply
with such terms and conditions as it may deem proper, obligating him to abide
by the decision.
The arbitration committee, before hearing any claim or matter of difference,
may require the party at whose instance the same is brought before it, to make
such deposit or furnish such other security for the costs of the proceeding as it
may deem proper, and may, in its decision, determine how such costs shall be
borne.
The governing committee, before hearing any appeal from a decision of the
arbitration committee taken by a party to the controversy, may require such
party to make such deposit or furnish such other security for the costs of the
appeal as it may deem proper, and may, in its decision, determine how such costs
shall be borne.
Third.6 A committee of arrangements, to consist of nine members, which com
mittee shall have the following powers and duties:
(a) To require observance of the provisions of the constitution and of the
rules adopted by the governing committee pursuant thereto which are or may be
specifically referred to the care of said committee of arrangements.
(&) To control and regulate all connection and communication with the ex
change by means of telegraph, telephone, wireless, messengers, or other device;
and to require the discontinuance of any such connection when, in the opinion
of the committee, it is contrary to the interest or welfare of the exchange.
(c) To have general care and supervision of the floor and the premises of the
exchange.
(d) To provide all supplies for the exchange.
(e )7 To make and enforce rules and regulations for the convenient trans
action of business upon the floor of the exchange, and relating to methods of
dealing thereon not specifically referred to other committees, and to secure good
order and decorum and the safety and comfort of members thereon or within
the premises of the exchange.
(f) To make and enforce rules and regulations with respect to the admission
to the floor of the exchange and its appurtenances of partners and employees
of members, and their exclusion therefrom, and with respect to the conduct of
all nonmembers upon the floor or within the premises of the exchange.
(g) To see that the method of conducting business by members shall not in
volve unnecessary delay in the performance of their obligations nor obstruct or
retard the business of other members or business upon the exchange.
(h) To exclude from the floor of the exchange or its premises any member
who, in the opinion of the committee, is in an unfit condition to transact busi
ness or who for any reason is in such condition that his presence upon the
floor or within said premises will, in the opinion of the committee, disturb the
orderly conduct of business by others.
(i) To consider complaints involving matters specifically referred to the care
of the committee and to impose the fines prescribed for the violation of rules
relating thereto, and where penalties for the violation o f such rules are not
prescribed, to impose fines of not more than $250 for each violation thereof;
or, in its discretion, to report the offender to the governing committee.
6 As amended May 22, 1930.

7 Effective June 10, 1926.

STOCK EXCHANGE PRACTICES

(;) To adopt and enforce rules and carry out measures necessary or proper
for the conduct of the annual election of the exchange and the election of the
nominating committee.
Fourth.8 A committee on business conduct, to consist of six members.
It shall be the duty of this committee to consider matters relating to the
business conduct and financial condition of members and their customers’
accounts, and to observe the course of transactions on the exchange, with the
view to seeing whether resort is being had to improper transactions.
It shall have power to investigate the dealings, transactions, and financial
condition of members, and to examine their books and papers. It may confer
with members regarding any matters within its jurisdiction and advise the presi
dent in respect to any such matters; and it shall report to the governing com
mittee any matter which in its judgment requires’ the consideration of that
committee.
Fifth. A committee on constitution, to consist of five members. All proposed
additions, alterations, or amendments to the constitution shall be referred to this
committee. It shall report thereon to the governing committee, at a regular
meeting or at a special meeting called expressly for the purpose of receiving its
report.
Sixth." A finance committee, to consist of seven members. It shall meet at
least once in each month, examine the accounts and vouchers of the exchange,
and report the result of its examinations to the governing committee. It may,
in its discretion, employ auditors or accountants and may accept and adopt their
report as its examination. It shall prepare and present to the governing com
mittee at the first regular meeting in December of each year a statement or
budget setting forth the estimated income and appropriations for expenses of
the exchange for the succeeding 12 months, and not less than 15 days prior to
the date upon which dues of members become payable make report and recom
mendation to the governing committee as to the amount thereof. It shall make
report and recommendation to the governing committee as to the financial policy
of the exchange.
It shall examine the condition of the gratuity fund, as provided in Article
X X III hereof.
Seventh. A law committee, to consist of five members, which shall deal with
matters of law affecting the interests of the exchange.
It shall act in an advisory capacity to the president when requested by him,
and shall, in association with the president, represent the exchange in all
matters affecting its general interests, and is authorized and empowered, in
its discretion, to examine into the dealings of any member of the exchange.
Eighth. A committee of five, to be known as the committee on odd lots and
specialists. This committee shall have general supervision over dealings in
lots of stocks of less than 100 shares and the methods of specialists. It may
formulate and submit to the governing committee for its adoption rules and
regulations with respect to said matters and shall require the observance
thereof when adopted.
Ninth. A committee of five, to be known as the committee on publicity. It
shall be the duty of this committee, under the direction of the president, to
keep the public correctly informed concerning matters of public interest having
to do with the exchange.
Tenth. A committee on quotations and commissions, to consist of nine mem
bers. It shall require observance of the provisions of the constitution and
of the rules adopted pursuant thereto relating to commissions, to partnerships,
to offices of members, whether main offices or other offices, and to foreign
joint-account arbitrage, and shall report to the governing committee any viola
tion thereof. It shall report to the governing committee any partnership or
any condition existing in an office which may appear to be detrimental to the
interest or welfare of the exchange.
It shall have charge of all matters relating to the collection, dissemination,
and use of quotations; it shall have power to approve or disapprove any appli
cation for quotation service to a nonmember, or for telephonic or telegraphic
wire or wireless connection between the office of a member or a member’s firm
and the office of any corporation, firm, or individual not a member of the
exchange transacting a banking or brokerage business, and it shall have power
at any time to disapprove the furnishing of any such quotation service or any
* As amended Apr. 24, 1930.

9 As amended Sept. 5, 1929.

STOCK EXCHANGE PRACTICES

such wire or wireless connection, and to require the discontinuance thereof.
It may inquire into wire or wireless connections of every kind whatsoever
between the office of a member and any member or nonmember, and may require
the discontinuance of any such connection.
Eleventh.14 A committee on securities, to consist of five members. Subject
to the provisions of the constitution and rules adopted by the governing com
mittee pursuant thereto, it shall have power to make rules relating to the
delivery of securities on exchange contracts, including reclamations therefor,
irregularities therein, and interest and dividends thereon; to due bills and
contracts for future delivery; to deposits on exchange contracts; and to decide
questions arising out of such subjects. It may also permit dealing in rights
growing out of securities already listed on the exchange, and may make regu
lations concerning any rights in which dealing may be permitted.
Twelfth.11 A committee on stock list, to consist of six members, which com
mittee shall have the following powers:
(a)
To make rules prescribing the requirements for listing and such other
rules and regulations in relation to the listing of securities as may be deemed
expedient or necessary.
(&)* To receive and consider all applications for placing securities on the
list of the exchange, and to make report and recommendation thereon to the
governing committee. In its discretion to permit dealings on a “ when issued ”
basis (1 ) in certificates of deposit or interim receipts for securities; (2) in
securities of a corporation the securities of which are already listed on the
exchange; or (3) in securities growing out of securities already listed; but in
every such case a full report shall be made to the governing committee at its
next meeting.
(c)
To place upon the list without report and recommendation to the gov
erning committee obligations of the Government of tine United States, or of any
State, county, or city thereof, and the external dollar bonds of a foreign
government.
((?) On receipt of assurances satisfactory to the committee that application
conforming to the requirements will be made for the listing of the definitive
securities, to place upon the list certificates of deposit or interim receipts for
securities, or temporary securities of a corporation, securities of which are
listed on the exchange, and to direct that any such certificates of deposit, in
terim receipts, or temporary securities be removed from the list and further
dealing therein prohibited; report of such actions shall be submitted to the
governing committee at its next meeting thereafter.
(e)
To direct that any security listed upon the exchange be removed from
the list and further dealing therein prohibited upon maturity of such security,
or when it shall appear that the outstanding amount thereof has become so
reduced as to make inadvisable further dealing therein upon the exchange.
if) To have charge of the arrangement and revision of the printed list of
securities.
S e c . 2 . There shall be a conference committee, to consist of the president,
vice president and treasurer, and chairmen of the committees on admissions,
arrangements, business conduct, law, odd lots and specialists, publicity, quota
tions and commissions, and stock list.
When a member of the conference committee is the chairman of two of said
committees the committee may appoint a member of the governing committee to
fill the vacancy caused thereby, and the committee may also, in its discretion,
appoint on said committee a member of the governing committee other than
those above specified.
The vice chairman or acting chairman of any of said committees, in the
absence of the chairman thereof, may act as a member of this committee.
The president of the exchange shall be the chairman and the vice president
the vice chairman of the committee.
This committee shall hear reports from the various committees and from
others, shall advise with them concerning questions affecting the welfare of
the exchange and shall recommend to the governing committee such action as
in its opinion will prove beneficial to the exchange.
* A s amended Sept. 29, 1927.
10 A s amended M ay 24, 1928.
“ A s amended Nov. 25, 1927.
M ay 8, 1931.

See also note 7, at end o f constitution, p. — , effective

STOCK EXCHANGE PRACTICES

Whenever the conference committee desires to have a subject under con
sideration by it referred to a subcommittee, the chairman, in his discretion,
may appoint thereon members of the exchange, not members of the conference
committee.
Sec. 3. Except as herein otherwise prescribed, each standing committee and
special committee shall determine the manner and form in which its proceed
ings shall be conducted, and shall make such regulations for its government as
it shall deem proper, and may fill any vacancies occurring in its membership,
and may act at a meeting, or without a meeting, and by a majority of its mem
bers or by such number less than a majority as said committee may by rule de
termine, subject always to the control and supervision of the governing
committee.
Sec. 4. Members of each standing committee at the time of an annual election,
who continue to be members of the governing committee or are reelected, shall
constitute such committee until either a new committee is appointed by the
governing committee or a committee ad interim is appointed by the president.
A rticle XI—Appeals
Section 1. An appeal to the governing committee, from the decision of a
standing committee other than the committee on admissions or the arbitration
committee, may be taken by a member of the exchange, interested therein, by
filing with the exchange a written notice of appeal addressed to the president
within 10 days after the decision has been rendered; a member of a standing
committee, other than the committee on admissions, taking part in the hearingof a matter, may, within two days after a decision has been made thereon,
appeal therefrom to the governing committee in writing addressed to the
president. There shall be no appeal from a decision of the committee on
admissions, except as provided in section 5, Article XVI, nor shall there be an
appeal from a decision of the arbitration committee by a party to the proceed
ing, except as provided in the second subdivision of section 1, Article X.B
A rticle XII.—Applications for mew berstiip—Eligibility—Initiation fee
Section 1. An applicant for membership must be at least 21 years of age and

a citizen of the United States.
Sec. 2. The membership of the exchange shall not be increased except by
action of the governing committee, which shall prescribe the number by which,
the membership shall be increased and the terms of admission. Such action
shall be submitted to the exchange on the same conditions as those prescribed
for amendments to the constitution.
Sec. 3. Members admitted by transfer shall pay to the exchange an initiation
fee of $4,000.
Sec. 4. If the initiation fee of an applicant for admission to membership is

not paid on the day of his election and notification by the secretary, such,
election shall be void.
Sec. 5. No person, elected to membership, shall be admitted to the privileges
thereof until he shall have signed the constitution of the exchange. By suck
signature he pledges himself to abide by the same as the same has been or shall
be from time to time amended, and by all rules and regulations adopted pursuant
to the constitution.
Sec. 6. The exchange shall not be liable for any damages sustained by a
member or his firm, growing out of the use or enjoyment by such member or
firm of the facilities afforded by the exchange to members for the conduct of
their business.
Sec. 7. The committee on admissions may, by a two-thirds vote of the entire
committee, authorize a partner of the president of the exchange, although not a
member of the exchange, to exercise the privilege of transacting business upon
the floor of the exchange for the account of the firm of which the president i»
a member.

Such privilege may not be exercised by the partner of the president, on whom
such privilege has been conferred, when the president is engaged in the trans
action of business on the floor of the exchange.
®As amended Dec. 19, 1929.

STOCK EXCH A N G E PRACTICES

The committee on admissions may at any time withdraw such privilege.
By a like vote, and under like conditions, the committee on admissions may
extend a similar privilege to a partner of each of the following-named per
sons, to w it: The vice president of the exchange, the chairman of the com
mittee of arrangements, the chairman of the committee on business conduct,
and the president of the New York Stock Exchange Building Co.
A r tic le

X III.—Dues and

fin es—

Penalty for nonpayment

S e c t i o n 1. The dues payable by a member of the exchange in each year,
exclusive of fines and of contributions under Article X X II of the constitution,
shall not exceed $1,000 a year, payable in advance in quarterly installments
on January 1, April 1, July 1, and October 1. The amount of each installment
shall be determined by the governing committee at least 15 days before the
date on which the same is payable.
The dues for each quarter may be divided by the governing committee into
two parts, one of which shall constitute the member’s contribution to the cur
rent expenses of the exchange for the quarter, as estimated by the governing
committee, and the other of which shall constitute the member’s contribution
for the quarter toward the capital investment of the exchange, which shall
include advances to its subsidiaries to cover capital expenditures.
Sew. 2. When a membership is transferred, the transferee shall pay to the
transferor on the date of transfer the unexpired portion of the dues for the
current quarter.
Sec. 3. A member who shall neglect to pay his dues, or a fine, or a contribu
tion to the gratuity fund for 45 days after the same shall become payable
shall be reported by the treasurer to the president and, after due notice, shall
be suspended until payment is made.
Should payment be not made within one year after payment is due, the
membership of the delinquent may be disposed of by the committee on admis
sions.
Sec. 4. Notwithstanding the death or expulsion of a member, his member
ship until transferred shall continue liable for dues to the exchange as from
time to time fixed by the governing committee, and for contributions under
the provisions of Article XXII.

A r tic le

XIV.—Transfer of membership

Section 1. A transfer of membership may be made upon submission of the

name of the candidate to the committee on admissions and the approval of the
transfer by two-thirds of the entire committee. Notice of the proposed transfer
shall be posted on the bulletin in the exchange for at least 10 days prior to
transfer.
Seg. 2. A member proposing to transfer his membership shall not, after the
tenth day of the posting of notice of the proposed transfer, make any contracts
on the exchange, pending the approval or disapproval by the committee on
admissions of the proposed transfer, unless the contract is expressly made on
behalf of another member of the exchange or on behalf of a firm registered
on the exchange which will continue to be a firm so registered notwithstand
ing the completion of such transfer. No contract made by a member pro
posing to transfer his membership or by his firm after the said tenth day shall,
if the transfer is approved by the committee on admissions, be the basis of a
claim against the proceeds of the transfer thereof under subdivision third of
section 3 of this article, but may, if the transfer is to another partner in the
firm registered on the exchange in which the transferring member is a partner,
constitute the basis of a claim under said subdivision third of section 3 against
the proceeds of the subsequent transfer of such membership by the partner to
whom it is transferred.
On the tenth day after the posting of notice of a proposed transfer of mem
bership all exchange contracts of the member proposing to make the transfer
or of his firm shall mature and, if not settled, shall be closed out as in the
case of an insolvency, unless the same are assumed or taken over by another
member of the exchange or firm registered thereon.
12As amended June 5, 1930.

STOCK EXCHANGE PRACTICES

Notice of a transfer to be made by the committee on admissions pursuant
to the provisions of the constitution shall be posted as in the case of a volun
tary transfer, and shall have the same effect in respect to open contracts and
unmatured debts and obligations of the former member as in the case of a volun
tary transfer.
Sec. 3. Upon any transfer of membership, whether mae by a member volun
tarily or by the committee on admissions in pursuance of the provisions of the
constitution, the proceeds thereof shall be applied to the following purposes
and in the following order of priority, viz:
First. The payment of all dues, fines, contributions, and charges payable to
the exchange by the member whose membership is transferred, and all indebted
ness of such member thereto.
Second. The payment of all dues, fines, assessments, and charges payable by
such member to the stock-clearing corporation, and all indebtedness of such
member thereto.
Third. The payment to creditors who are members of the exchange or firms
registered thereon of all filed claims arising from contracts subject to the rules
of the exchange entered into prior to the general amendment of the constitu
tion in 1925 if and to the extent that the same shall be allowed by the commit-,
tee on admissions, and such claims arising from members’ contracts entered into
subsequent to such date, if and to the extent that the same shall be determined
by the committee on admissions to have arisen out of contracts had between the
parties thereto in the ordinary course of business and shall have been allowed
by the committe on admissions.
All contracts which do not, pursuant to section 2 of this article, mature by
reason of the transfer of the membership may for the purposes hereof be treated
as though they had matured pursuant to said section, and the amount due
thereon may be fixed and determined by the committee on admissions on the
basis of market values or such other basis as shall be deemed fair and just by
said committee.
If a claim based on a contract is contingent or the amount that will be
ultimately due thereon can not for any reason be immediately ascertained and
determined, the committee on admissions may out of the proceeds of the mem
bership reserve and retain such amount as it may deem appropriate pending the
determination of the amount due on such claim.
A claim shall be allowed by the committee on admissions only for the amount
due thereon after the proceeds of the sale of all collateral held therefor or the
fair value of such collateral as determined by the committee on admissions has
been credited thereon and the committee on admissions may require that any
such collateral shall be disposed of before passing on the claim.
Fourth. If the proceeds of a transfer of a membership are insufficient to pay
all the claims arising out of contracts allowed by the committee on admissions,
said claims shall be paid pro rata, except as provided in sections 4 and 5 of
this article.
Fifth. The surplus, if any, of said proceeds shall be paid to the person whose
membership is transferred, or to his legal representatives, upon the execution
by him or them of a release or releases satisfactory to the committee on
admissions.
Seo. 4. A member of the exchange or firm registered thereon shall forfeit
all right under section 3 of this article to share in the proceeds of a member
ship which has been transferred, unless such member or firm files a statement
of his or its claim with the committee on admissions prior to the transfer; such
claim as allowed by the committee on admissions may be paid out of any sur
plus remaining after all other claims allowed by said committee have been paid
in full, and may be paid in preference to claims referred to in section 5 of this
article not already paid when it is filed.
Se». 5. Claims growing out of transactions between partners who are mem
bers of the exchange shall not share in the proceeds of the membership of one
of such partners until after all other claims as allowed by the committee on
admissions have been paid in full.
S e o . 6. When a member dies, his membership may be disposed of by the
committee on admissions.
Sex;. 7. When a member is expelled or becomes ineligible for reinstatement,
his membership may be disposed of forthwith by the committee on admissions.
Shc. 8. The death, expulsion, or suspension of a member shall not affect the
rights of creditors under the provisions of section 3 of this article.

STOCK EX CH A N GE PRACTICES

Sec. 9. When a member is in debt to another member, the death of the creditor
member or the transfer of his membership, either by himself voluntarily or by
the committee on admissions, shall not affect the rights of said creditor mem
ber, his firm, or estate to share in the proceeds of the membership of the debtor
member under this article in the same manner and to the same extent as if
such creditor member had not died or his membership had not been transferred.
A r t ic le X V .— Members1 contracts

and exchange contracts

Section 1. All contracts of a member of the exchange, or of a firm having
a member of the exchange as a general partner, with any other member of the
exchange, or with any other firm having a member of the exchange as a general
partner, for the purchase, sale, borrowing, loaning, or hypothecation of securi
ties, or for the borrowing, loaning, or payment of money, whether occurring
upon the floor of the exchange or elsewhere, are members’ contracts.
Sec. 2. Exchange contracts shall include all members’ contracts—
(1) Made on the exchange.
(2) Not made on the exchange, unless made subject to the rules of another
exchange, or unless the parties thereto have expressly agreed that the same
shall not be exchange contracts.
Seo. 3. The provisions of the constitution of the exchange and of the rules
adopted pursuant thereto shall be a part of the terms and conditions of all ex
change contracts, and all such contracts shall be subject to the exercise by the
governing committee and the standing committees and the stock clearing cor
poration of the powers in respect thereto vested in them by the constitution and
rules.
A r tic le X

VI.— Insolvent members— Suspension— Reinstatement

Sec. 1. A member who fails to perform his contracts, or is insolvent, or who
is a partner in a firm, registered upon the exchange, which fails to perform its
contracts, or is insolvent, shall immediately inform the secretary, in writing,
that he or his firm is unnble to meet his or its engagements, and prompt notice
thereof shall be given to the exchange. He shall thereby become suspended
from membership until, after having settled with his creditors, or the creditors
of his firm, he has been reinstated by the committee on admissions.
Sec. 2. Whenever it shall appear to the president that a member or firm reg
istered on the exchange has failed to meet his or its engagements or is insolvent,
or the president has been advised by the committee on business conduct or the
executive committee of the stock clearing corporation that such member or firm
is in such financial condition that he or it can not be permitted to continue in
business with safety to his or its creditors or the exchange, the president shall
announce to the exchange the suspension of such member or firm, which sus
pension shall continue until the member has been reinstated, as provided in the
last preceding section.
Sec. 3. Every member suspended under the provisions of this article, shall im
mediately afford every facility required by the committee on admissions for
the investigation of his affairs, and shall after the announcement of his sus
pension file with the secretary of the exchange a written statement covering
all information required by the committee on admissions, including a complete
list of his creditors and the amount owing to each.
Sec. 4. If a member, suspended under the provisions of this article, fails to
settle with his creditors and apply for reinstatement, within one year from
the time of his suspension, or within such further time as the governing com
mittee may grant, or fail to obtain reinstatement as hereinafter provided, his
membership shall be disposed of by the committee on admissions.
The governing committee may, by a two-thirds vote of the members present,
extend the time of settlement for periods not exceeding one year each.
Sec. 5. When a member, suspended under the provisions of this article, applies
for reinstatement, notice thereof shall be given by the secretary to the members
of the exchange, by notifying each member of such application directly and
through the weekly bulletin, and by posting notice upon the bulletin board, at
least one week prior to the consideration by the committee on admissions of said
application. The applicant shall furnish to said committee a list of his credi
tors, a statement of the amounts originally owing, and the nature of the settle
ment in each case. If he furnishes satisfactory proof of settlement with all his

STOCK EXCHANGE PRACTICES

creditors, the committee shall proceed to ballot for him in accordance with its
rules and regulations. Failing to receive the approving vote of two-thirds of
the entire committee, the applicant shall be entitled to be ballotted for at two
subsequent regular meetings of the committee, to be designated by himself:
Provided, however, That the three ballotings to which the applicant shall be
entitled shall be within one year from the date of his suspension, or within such
further extended time for settlement as may have been granted by the governing
committee.
If on the third ballot the applicant be rejected, he may appeal within 10 days
thereafter to the governing committee, who may by an affirmative vote of not
less than 25 of its members reinstate the applicant.
Sec. 6. Whenever the governing committee shall determine, upon the report
of the committee on admissions, that a member suspended under the provisions
of this article has been guilty of irregularities or unbusinesslike dealing, said
member may by a two-thirds vote of the existing members of the governing com
mittee, be declared ineligible for reinstatement.
S e c . 7. A member of the exchange suspended under the provisions of this
article may be proceeded against by the governing committee for any offense
committed by him either before or after the announcement of his suspension,
in all respects as if he were not under suspension.
S e c . 8. A member suspended under the provisions of this article who has not
been declared ineligible for reinstatement and who has not also been suspended
under the provisions of Article XVII hereof may have his business transacted at
members’ rates.
A r tic le

XVII.—Expulsion and suspension from membership

1. Unless otherwise specifically provided, the penalty of suspension
from membership may be inflicted, and the period of suspension determined, by
a vote of a majority of the existing members of the governing committee; and
the penalty of expulsion from membership or of ineligibility of a suspended
member for reinstatement may be inflicted by the vote of two-thirds of the
existing members of said committee.
Sec. 2. A member who shall be adjudged by a two-thirds vote of all the
existing members of the governing committee to be guilty of fraud or of
fraudulent acts shall be expelled.
Sec. 3. A member who shall be adjudged by a majority of all the existing
members of the governing committee guilty of making a fictitious transaction
or of giving an order for the purchase or sale of securities the execution of
which would involve no change of ownership, or of executing such an order
with knowledge of its character, shall be suspended or expelled as said com
mittee shall determine.
Sec. 4. Purchases or sales of securities or offers to purchase or sell securities,
made for the purpose of upsetting the equilibrium of the market and bringing
about a condition of demoralization in which prices will not fairly reflect mar
ket values, are forbidden, and any member who makes or assists in making
any such purchases or sales or offers to purchase or sell with knowledge of
the purpose thereof, or who, with such knowledge, shall be a party to or
assist in carrying out nny plan or scheme for the making of such purchases
or sales or offers to purchase or sell, shall be deemed to be guilty of an act
inconsistent with just and equitable principles of trade.
Sec. 5. Whenever the governing committee shall adjudge that a member has
made a misstatement upon a material point to the governing committee or
to a standing or special committee of the exchange or to the executive com
mittee or board of directors of the Stock Clearing Corporation, or on his
application for membership has made a material misstatement to the com
mittee on admissions, the governing committee shall suspend or expel said
member as it may determine.
Whenever the governing committee shall adjudge that a member prior to
his application for membership has been guilty of a fraudulent or dishonest
act and that the facts and circumstances thereof were not disclosed to the
committee on admissions on his application for membership, the governing
committee may expel such member.
S e c . 6. A member who shall be connected, either through a partner or other
wise, with another exchange or similar organization in the city of New York
S e c tio n

STOCK EXCHANGE PRACTICES

which permits dealings in any securities dealt in on the exchange or who
directly or indirectly deals upon such exchange or organization or who deals
publicly outside the exchange in securities listed or quoted on the exchange
shall be liable to suspension or expulsion as the governing committee may
determine.
Sec. 7. A member who shall have been adjudged by a majority vote of all
the existing members of the governing committee guilty of a violation of the
constitution of the exchange or guilty of a violation of a rule adopted pursuant
to the constitution, or guilty of the violation of a resolution of the governing
committee regulating the conduct or business of members or guilty of conduct
or proceedings inconsistent with just and equitable principles of trade may be
suspended or expelled as the said committee may determine, unless the offense
is the violation of a resolution or rule for which a different penalty has been
provided, in which case such other penalty may be imposed.
Sec. 8. The governing committee may, by a vote of a majority of all its
existing members, suspend from the exchange for a period not exceeding
five years a member who may be adjudged guilty of any act which may be
determined by said committee to be detrimental to the interest or welfare of
the exchange.
Seo. 9. If a member of the exchange is required by the governing com
mittee to submit his books and papers, or the books and papers of his firm,
or any portion thereof, to said committee or to any standing or special com
mittee, or to furnish any information to or to appear and testify before, or
to cause any of his partners or employees to appear and testify before any
such committee, or is required by the law committee or the committee on
business conduct to submit his books and papers or the books and papers of
his firm, or any portion thereof to said law committee or committee on business
conduct, or to furnish information to or to appear and testify or cause any
of his partners or employees to appear and testify before such committee, and
shall refuse or fail to comply with such requirement, he may be suspended or
expelled, as the governing committee may determine.
Sec. 10. If the- governing committee shall deem that it is to the interest and
welfare of the exchange, or to the public interest, or in the interest of just
and equitable principles of trade, to facilitate the examination by the authori
ties of another exchange of any transaction in which a member of the exchange
has been concerned and that the testimony of such member, his partners, or
employees or his books and papers, or the books and papers of hisi firm or
any partner therein, are material to such examination and shall direct such
member to appear and testify, or to cause any of his partners or employees
to appear and testify, or to produce such books and papers before the authori
ties of said other exchange, or any committee thereof, for the purposes of
such examination, and the member of the exchange shall refuse or fail to
comply with such direction, he may be adjudged guilty of an act detrimental
to the interest or welfare of the exchange.
S e o . 11. An accusation, charging a member before the governing committee
with having committed an offense, shall be in writing; it shall specify the
charge or charges against such member with reasonable detail, and shall be
signed by the person or persons making the charge or charges. A copy of such
charge or charges shall be served upon the accused member either personally,
or by leaving the same at his office address during business hours, or by
mailing it to him at his place of residence. He shall have 10 days from the
date of such service to answer the same, or such further time as the governing
committee in its discretion may deem proper. The answer shall be in writing,
signed by the accused member, and filed with the secretary of the exchange.
Upon the answer being filed, or if the accused shall refuse or neglect to make
answer as hereinbefore required, the governing committee shall, at a regular or
special meeting thereafter, proceed to consider the charge or charges ; if such
meeting be a special meeting, notice of the object thereof shall be sent to the
members of the committee. Notice of such meeting shall be sent to the
accused; he shall be entitled to be personally present thereat, and shall be
permitted in person to examine and cross-examine all the witnesses produced
before the committee, and also to present such testimony, defense, or explana
tion as he may deem proper. After hearing all the witnesses and the member
accused, if he desires to be heard, the governing committee shall determine
whether said member is guilty of the offense or offenses charged. If it deter-

STOCK E X CH A N G E PRACTICES

mines that the accused is guilty, the governing committee may expel such
member, or may suspend him, as the case may b e; the result shall be announced
to the exchange by the president, and a written notice thereof served upon said
member in the manner hereinbefore provided. The finding of the governing
committee shall be final and conclusive.
S eo . 12. Should a member be accused before the governing committee of
having committed an offense the penalty for which is limited to a fine of not
exceeding $250 or to suspension for a period not exceeding 60 days, said com
mittee may proceed summarily, and the method of procedure required by
the preceding section shall not apply. The accused shall be summoned
before the committee, informed of the nature of the accusation against him, and
afforded an opportunity for explanation by personal or other testimony. If
the committee shall determine by a majority vote of all its existing members
that the accused is guilty, it may, by a similar vote, impose the penalty for the
offense. If the penalty imposed is suspension, the result shall be announced as
under the preceding section.
Sec. 13. When a member is suspended by the governing committee, such
member shall be deprived during the term of his suspension of all rights and
privileges of membership, except those pertaining to the gratuity fund, but he
may be proceeded against by the governing committee for any offense other
than that for which he was suspended.
The expulsion of a member terminates all rights and privileges arising out
of his membership except such rights in respect to the proceeds of the transfer
thereof as he may have under the provisions of sections 3 and 9 of Article XIV.
Seo. 14. No member of the exchange shall have the right to be represented
by professional counsel in any investigation or hearing before the governing
committee or any standing or special committee.
A r tic le

XYIII.— Stock-clearing corporation

S e c t i o n 1. The rights of the exchange as owner of the capital stock of the
Stock Clearing Corporation shall be exercised by the governing committee.
Seo. 2. In every exchange contract delivery and payment shall be made
through the Stock Clearing Corporation, as required by the by-laws and rules
of said Stock Clearing Corporation, unless otherwise stipulated in the bid or
offer or it is otherwise agreed by the parties to the contract, or the Stock
Clearing Corporation, either in the particular instance or in pursuance of its
by-laws and rules, will not act in the matter.
If a party to any such contract is not a clearing member, as defined in the
by-laws of the Stock Clearing Corporation, he shall cause the transaction to be
cleared or settled for him by a clearing member.
Seo. 3. The by-laws and rules of the Stock Clearing Corporation and the
amendments thereto adopted from time to time and approved by a majority of
the governing committee of the exchange shall be a part of the terms and con
ditions of every contract which is to be cleared or settled through the Stock
Clearing Corporation.
A r t i c l e X IX .—Commissions

Seo. I.13 Commissions shall be charged and collected upon the execution of all
orders for the purchase or sale for account of others of securities admitted to
dealings upon the exchange, and these commissions shall be at rates not less than
the rates in this article prescribed; and shall be net and free from any rebate,
return, discount, or allowance made in any shape or manner, or by any method
or arrangement direct or indirect. No bonus or percentage or portion of a com
mission, whether such commission be at or above the rates herein established,
or any portion of a profit except as may be specifically permitted by the con
stitution or a rule adopted by the governing committee, shall be given, paid, or
allowed, directly or indirectly, or as a salary or portion of a salary, to a clerk
or person for business sought or procured for any member of the exchange or
firm registered thereon.
S eo . 2 . 7 Commissions shall b e as follows:
(a)
On business for parties not members of the exchange, including joint
account transactions in which a nonmember is interested, and on transactions
for partners not members of the exchange:
7 Effective June 10, 1926.

“ As amended May 13, 1926.

STOCK EXCHANGE PRACTICES

On stocks 14 (except as to 10-share-unit stocks, as stated below) :
Price and rate per share
Selling under 50 cents__________________________ As mutually agreed.
Selling at 50 cents and above, but under $1_______Not less than 3 cents.
Selling at $1 and above, but under $10___________ Not less than 7% cents.
Selling at $10 and above, but under $25_________ Not less than 12%. cents.
Selling at $25 and above, but under $50________ Not less than 15 cents.
Selling at $50 and above, but under $75_________ Not less than 17% cents.
Selling at $75 and above, but under $100_________ Not less than 20 cents.
Selling at $100 and above, but under $200______ Not less than 25 cents.
Selling at $200 and above, but under $250______ Not less than 30 cents.
For each additional $50 in price_______________ 5 cents additional.
Provided, however, That on every transaction which involves an amount of
$15 or more, the minimum commission shall be not less than $1.
On 10-share-unit stocks (as designated by the committee of arrange
ments) : 1415
Price and rate per share
Selling at less than $1 per share_______________ As mutually agreed.
Selling at $1 per share and above, but under $5_Not less than 5 cents.
Selling at $5 per share and above, but under $10__ Not less than 10 cents.
Selling at $10 per share and above, but under $100_ Not less than 20 cents.
Selling at $100 per share and above_____________ The same rates as provided
for other stocks.
On bonds : 14Not less than $2.5016 per $1,000 par value.
On subscription rights:
Price and rate per right
Selling under 50 cents________________________ As mutually agreed.
Selling at 50 cents and above, but under $1_____ Not less than 3 cents.
Selling at $1 and above, but under $5___________ Not less than 5 cents.
Selling at $5 and above, but under $10_________ Not less than 7% cents.
Selling at $10 and above_______________________ Not less than 15 cents.
(6)
On business for members of the exchange when a principal is not given
up:
On stocks (except as to 10-share-unit stocks, as stated below) : 14
Price and rate per share
Selling under 50 cents_________________________ As mutually agreed.
Selling at 50 cents and above, but under $1_____ Not less than % cent.
Selling at $1 and above, but under $10__________ Not less than 1% cents.
Selling at $10 and above, but under $125________ Not less than 3% cents.
Selling at $125 and above______________________ Not less than 5 cents.
On 10-share-unit stocks (as designated by the committee of arrange
ments ) : 1415
Price and rate per share
Selling at less than $1 per share_______________ As mutually agreed.
Selling at $1 per share and above, but under $5__ Not less than 2 cents.
Selling at $5 per share and above, but under $10_Not less than 4 cents.
Selling at $10 per share and above_____________ _Not less than 8 cents.
On bonds: Not less than $1.2518 per $1,000 par value.14
On subscription rights:
Price and rate per right
Selling under 50 cents__________________________As mutually agreed.
Selling at 50 cents and above, but under $1______ Not less than % cent.
Selling at $1 and above, but under $5___________ Not less than 1% cents.
Selling at $5 and above, but under $10-------------- -Not less than 1% cents.
Selling at $10 and above________________________Not less than 3% cents.
MSee also par. (d) re “ Obligations of the United States, Puerto Rico,” etc., p. —.
16Effective June 10, 1926. As amended Jan. 7, 1931.
18As amended Oct. 29, 1925, and Jan. 17, 1930.

STOCK EXCHANGE PRACTICES

(c) On business for members of the exchange when a principal is given up r
On stocks (except as to 10-share-unit stocks, as stated below) : 14
Price and rate per share
Selling under 50 cents__________________________ As mutually agreed.
Selling at 50 cents and above, but under $1______ Not less than y2 cent.
Selling at $1 and above, but under $10_________ Not less than 1% cents.
Selling at $10 and above, but under $125_________Not less than 2% cents.
Selling at $125 and above______________________ Not less than 3 cents.
Except that when the amount dealt in is less than 100 shares of stock the
commission shall be not less than 1 cent per share on stocks selling below $10
per share and 2 cents per share on stock selling at $10 per share and over.
On 10-share-unit-stocks (as designated by the committee of arrangements) : uir
Price and rate per share
Selling at less than $1 per share________________ As mutually agreed.
Selling at $1 per share and above, but under $5— Not less than 1 cent.
Selling at $5 per share and above, but under $10___ Not less than 2 cents.
Selling at $10 per share and above______________ Not less than 4 cents.
On bonds: Not less than 75 cents18 per $1,000 par value.14
On subscription rights:
Price and rate per right
Selling under 50 cents__________________________ As mutually agreed.
Selling at 50 cents and above, but under $1______ Not less than y2 cent.
Selling at $1 and above, but under $5___________ Not less than % cent.
Selling at $5 and above, but under $10_________ Not less than 1% cents.
Selling at $10 and above________________________ Not less than 2% cents.
(d)
On obligations of the United States, Puerto Kico, Philippine Islands, and
States, Territories, and municipalities therein; bonds or notes having five years
or less to run; securities which, pursuant to call or otherwise, are to be re
deemed within 12 months : 19
Such rates to members or nonmembers as may be mutually agreed upon:
Provided, however, That the committee on quotations and commissions may de
termine special rates on any or all of the above-mentioned securities, reporting
the same to the governing committee.20
Sec. 3. If a member of the exchange, or firm registered thereon, engages in
transactions in which the member or firm is acting as a dealer in securities of
original issue, the rates of commission prescribed in this article shall not apply
to such transactions if not made on the exchange: Provided, however, That such;
transactions shall be subject to such regulations as the committee on quota
tions and commissions may from time to time prescribe.
Sec. 4. No member shall make a proposition for the transaction of business at
less than the minimum rates of commission prescribed in this article.
A rticle X X .—Office address; partnerships and other business connections;

branch offices
Section 1. Every member shall register with the secretary an address and
subsequent changes thereof where notices may be served. The registered ad
dress of every member who personally transacts business upon the exchange
must be in its vicinity.
Members may by the consent and approval of the committee on quotations and
commissions establish offices other than main offices. Such offices must be in
charge of a partner or of a manager or clerk acceptable to said committee. All
offices of members shall be subject to such rules as may be prescribed from time
to time by the committee on quotations and commissions, with the approval
of the governing committee.
14 See a lso p ar. ( d )
17 A s am en ded J u n e
^ A s am en ded O ct.
19 A s am ended D ec.
See n o te 1, on p.

r e “ O b liga tion s o f the U nited S ta tes, P u e r to R ic o ,” e tc., p. — .
10, 1926, and Jan. 7, 1931.
29, 1925, Ju n e 28, 1928, and Jan . 17, 1930.
16, 1926.
—.

STOCK EXCHANGE PRACTICES

The committee on quotations and commissions may require that the name,
remuneration, term of employment, and actual duties of any employee of a
member of firm shall be stated to the committee, together with such other
information with respect to the employee as the committee may deem requi
site ; and said committee may, in its discretion, disapproved of said employment,
remuneration, or term of employment.
No employee shall be paid other than a fixed salary not varying with the
business unless the prior written approval therefor shall have been given by
the committee on quotations and commissions.
Seo. 2. No member shall conduct business under a firm name unless he shall
have at least one general partner, or was conducting business in such name at the
time of the adoption of the revised constitution of 1925: Provided, however,
That if by death or otherwise the general partners in a firm registered on the
exchange are reduced to the exchange member he may continue business in the
firm name for such period only as may be allowed by the committee on quota
tions and commissions.
When a member intends to form a partnership, or admit other individuals
to an existing partnership, he shall duly notify the secretary in writing to that
effect, and opportunity shall be given the committee on quotations and commis
sions to consider the proposed arrangement before the same becomes effective.
On receipt, of such notice from a member, the secretary shall cause the same
to be posted upon the bulletin of the exchange, and it shall also be published
in the weekly bulletin. A member shall promptly notify the secretary of the
retirement from a partnership of which he is a member of any individual or of
the dissolution of such partnership.
Every partner in a firm represented on the exchange must have a fixed or
determinable interest in its entire business.
Seo. 3. No person shall at the same time be a member of more than on firm
represented on the exchange, whether as a general or as a special partner.
Sec. 4. A member shall not form a partnership nor, unless permitted by the
governing committee, continue in partnership with a suspended member of the
exchange, nor with any person who has been expelled therefrom, nor with an
insolvent person, or a person who may have previously been a member of the
exchange and against whom any member holds a claim, arising out of trans
actions made during the time of such membership, and which has not been
released or settled.21
Sec. 5. A firm having as a general partner a member of the exchange, shall
be entitled to have its business transacted at the rates of commission prescribed
for members.
The privilege provided for under this section shall extend to a branch house
or branch office only when conducted under the same name as the parent firm
and when the partners and their respective interests therein are identical with
the partners and their respective interests in the parent firm.
A member, who is a special partner in a firm, does not thereby confer any of
the privileges of the exchange on such firm, and on all business done by him for
such firm commissions must be charged and collected at rates not less than the
rates prescribed in Article X IX .22
Seo. 6. A member of the exchange who is a general partner in a firm rep
resented thereon is liable to the same discipline and penalties for any act or
omission of said firm, as for his own personal act or omission; but the govern
ing committee may in its discretion by a vote of not less than 30 members
relieve him from the penalty therefor.
Sec. 7. Whenever it shall appear to the governing committee that a member
has formed a partnership, or established an office or headquarters, or is indi
vidually or through any member of his firm, interested in a partnership or
business, or has formed any business connection whatever whereby the interest
or good repute of the exchange may suffer, said committee may require the
dissolution of any such partnership or discontinuance of such business, office or
headquarters, or business connection, as the case may be.
S e c . 8. Whenever it shall appear to the governing committee that a member,
individually or through his firm, or a partner or partners therein, has such a
business connection with a corporation or association that the corporation or
association dominates the business of the member or firm or controls the policy
of such business, said committee shall require the discontinuance of such busi
ness connection.
21As amended Aug. 11, 1927.

22As amended Oct. 25, 1928.

STOCK EXCHANGE PRACTICES
A r tic le

X X I.—Corporations and associations

A member of the exchange or firm registered thereon shall not act as a broker
for any corporation or association in the purchase or sale of securities if such
corporation or association is controlled through stock ownership or otherwise by
such member or firm or by a member or members of such firm and is itself
engaged in the business of buying and selling securities as broker for others.
If a member of the exchange or a partner of such member is an officer,
director, or employee of any corporation or association engaged in the business
of buying and selling securities for its own account or as broker for others,
or if such member or his partner or firm is a stockholder in any such corpora
tion or association, such member shall not participate in any commission paid
by such corporation or association unless either such member or the firm in
which he is a partner is engaged in a general brokerage business and in con
nection with such business actively participates in the transaction on which
such commission is paid or such member is actively engaged in business as a
floor broker.
No member of the exchange or firm registered thereon shall suffer or permit
any corporation or association engaged in the business of buying and selling
securities for its own account or as broker or agent for others to use as its
office the office or any branch office of such member or firm, or to employ in its
business the same business organization as that employed by such member or
firm, nor voluntarily suffer or permit any such corporation or association to
conduct its business under a name that does not clearly differentiate such
corporation or association from such member or firm.
If a member of the exchange or a firm registered thereon, or a member or
members of such firm control, directly or indirectly through stock ownership or
otherwise, a corporation or association engaged in the business of buying and
selling securities for its own account or as broker or agent for others, such
member or firm shall be responsible for any fraud committed by such cor
poration or association or for any act or proceeding of such corporation or
association contrary to just and equitable principles of trade or detrimental to
the interest or welfare of the exchange, or tending to defeat the purpose of the
commission law of the exchange or any provision of the constitution of the
exchange or rules or resolutions adopted pursuant thereto, to the same extent
and in the same manner as though such fraud or act or proceeding had been the
fraud, act, or proceeding of such member or firm and such member or firm shall
be under the same duty to produce the books, records, and papers of any such
corporation or association for the examination and inspection of the governing
committee of the exchange or of any standing or special committee thereof, or of
anyone acting under the authority of any such committee, and to furnish
evidence in regard to the acts and proceedings of such corporation or asso
ciation, and shall be subject to the same penalties for the neglect of such duty,
as if such books, records, papers, acts and proceedings were the books, records,
papers, acts and proceedings of such member or firm.
T h e G r a tu ity F u n d and I t s T ru s te e s
A r tic le

X X II.—The gratuity fund

S e c t i o n 1. Every person who shall become a member of the exchange shall
pay to the trustees of the gratuity fund the sum of $15 before he shall be
admitted to the privilege of membership.23
Sec. 2. Each member of the exchange, by signing the constitution, pledges
himself to make, upon the death of a member of the exchange, a voluntary gift
to the family of each deceased member in the sum of $15, which shall be paid
by the member at quarterly periods on the dates on which dues to the exchange
are to be paid.24
Seo. 3. The faith of the exchange is hereby pledged to pay, within one year
after proof of death of any member, out of the money collected under the pro
visions of this article, the sum of $20,000, or so much thereof as may have been
collected, to the persons named in the next section, as therein provided, which
money shall be a voluntary gift from the other members of the exchange, free
from all debts, charges, or demands whatever.24
“ A s amended Apr. 24, 1930.

24 A s am en d ed

Mar. 28, 1930.

STOCK EXCHANGE PRACTICES

Sec. 4. Should the member die leaving a widow and no issue, then the whole
sum shall be paid to such widow for her own use.
Should the member die leaving a widow and issue, then one-half shall be paid
to the widow for her separate use and one-half to the child for its use or to the
children for their use, share and share alike: Provided, That the share of
minor children shall be paid to their guardian and that the issue of any de
ceased child shall be entitled to receive the share which said child would have
received if living, if of age directly, or if minors, through his, her, or their
guardian or guardians.
Should the member die leaving issue and no widow, then the whole sum shall
be paid to the children as directed in the preceding paragraph to be done with
the moiety; but no adopted child shall share in the gratuity if the memjber
leaves a widow or issue.
Should the member die leaving neither widow nor issue, but an adopted child
or children, then the whole sum shall be paid to such adopted child or children,
the issue of any deceased adopted child to take the share which the parent
would have taken if living: Provided, That such adoption shall have been in
such manner and form that it will be recognized as valid by the courts of the
State of New York.
Should the member die leaving neither widow, issue, adopted child, nor issue
of a deceased adopted child, then the whole sum shall be paid to the same
persons who would, under the laws of the State of New York, take the same by
reason of relationship to the deceased member had he owned the same at the
time of his death; and if there be no such person, then the amount applicable
under section 3 of this article in such ease shall be held by the trustee of the
gratuity fund for the general purposes of that fund.
In case any person entitled to any gratuity shall be under age and have no
guardian entitled to receive payment at the maturity thereof, the trustees may,
in their discretion, deposit such money with the Bank of New York & Trust Co.
or the United States Trust Co., as the property of, and in trust for, such minor;
and in like manner if any person apparently entitled to any payment fails to
claim, or has disappeared or can not be found after reasonable inquiry, the
trustees may deposit the presumptive share of such person in either of said
trust companies to the credit of “ the trustees of the gratuity fund of the New
York Stock Exchange, in trust,” to the end that it may be paid to such person,
if afterwards found, or otherwise to the parties who may subsequently establish
their right thereto; a similar discretion shall apply in the case of any dispute
between claimants for a gratuity or a portion thereof.
In all cases a certified copy of the proceedings before a surrogate or judge
of probate shall be accepted as proof of the rights of the claimants, be deemed
ample authority to the exchange to pay over the money, shall protect the
exchange in so doing, and shall release the exchange forever from all further
claim or liability whatsoever.

Seo. 5. Nothing herein contained shall ever be taken or construed as a joint
liability of the exchange or its members for the payment of any sum whatever;
the liability of each member, at law or equity, being limited to the payment of
$10 only on the death of any other member, and the liability of the exchange
being limited to the payment of the sum of $10,000, or such part thereof as may
be collected, after it shall have been collected from the members, and not
otherwise.
Seo. 6. Nothing herein contained shall be construed as constituting any estate
in esse which can be mortgaged or pledged for the payment of any debts; but it
shall be construed as the solemn agreement of every member of the exchange to
make a voluntary gift to the family of each deceased member, and of the ex
change, to the best of its ability, to collect and pay over to such family the
said voluntary gift.

Sex?. 7. The trustees of the gratuity fund shall pay over to the treasurer of the
exchange the net income which has been received as interest on the fund during
each year, less the necessary expenses of management and distribution, and each
member of the exchange shall be credited with his proportion of the amount
in reduction of his payments under this article.
Sec. 8. The provisions of this article shall not extend to any member whose
connection with the exchange shall have been severed by the transfer of his
membership, whether the same is made voluntarily or involuntarily, nor to any
member who now is or hereafter may be expelled by the governing committee,
but shall extend to suspended members.

STOCK EXCHANGE PRACTICES
A rticle X X III.— The trustees of the gratuity fund

Section 1. The execution of the provisions of the preceding article, and the
management and distribution of the fund created thereunder shall be under
the charge of a board of trustees, acting as agent for the exchange to be known
as “ the trustees of the gratuity fund,” and to consist of the president and the
treasurer of the exchange, and of five other trustees chosen for the term of
five years.
In case of a vacancy occurring among the five chosen trustees, the governing
committee, at its next regular meeting thereafter, shall proceed to fill the same
until the next annual election of the exchange.
Sec. 2. It shall be the duty of the trustees to invest and keep securely in
vested, in accordance with the laws of the State of New York regulating trust
funds, all the principal of the gratuity fund and accretions arising therefrom
other than interest.
All stock shall be registered in the name of “ the trustees of the gratuity fund
of the New York Stock Exchange,” but without specifying the individual names
of such trustees, and may be disposed of and assigned by any four of said
trustees.
Sec. 3. On the first Monday after the annual election of the exchange, or as
soon thereafter as may be practicable, the trustees of the gratuity fund shall
organize by electing a chairman and a secretary and treasurer of the gratuity
fund, who shall serve for one year or until their successors shall be chosen. The
offices of secretary and treasurer may be held by the same person.
Sec. 4. There shall be a regular meeting of the trustees on the third Monday
in each month. The chairman may call a special meeting at any time; he shall
call a meeting at the request of two trustees. At a meeting four trustees shall
constitute a quorum.
Sec. 5. It shall be the duty of the chairman to preside at meetings; he shall
vote on all questions; he shall present to the governing committee at its first
regular meeting in January of each year a report of the condition of the fund,
with a statement by the treasurer of receipts and disbursements.25
Sec. 6. It shall be the duty of the secretary to keep regular minutes of the
proceedings of the trustees, and to give notice of meetings.
Seo. 7. It shall be the duty of the treasurer to receive and sign vouchers for
all moneys paid to the trustees, which he shall deposit in such institutions as
they may direct, to his credit as “ treasurer of the gratuity fund of the New
York Stock Exchange.”
He shall have the custody of all securities belonging to the fund, subject tq
the examination and control of the trustees.
He shall keep, or cause to be kept, proper books of account.
He shall receive and keep a record of all claims for payment under Article
X X II of the constitution of the exchange, and present the same to the trustees
for their action; when allowed and approved by the trustees, he shall pay the
same; but no such payment shall be made until directed by the trustees.
He shall make such investments for the fund as may be ordered by the
trustees, and report the same to the trustees at the next regular meeting.
His books shall always be open to the inspection of any trustee, and he shall
make to the chairman an annual statement of receipts and disbursements.
He shall receive out of the fund such compensation per annum as may be fixed
by the trustees and approved by the governing committee of the exchange.
Sec. 8. The trustees shall have power at their discretion to consult and em
ploy legal counsel; they shall be authorized to make disbursements out of the
fund to defray necessary expenses.
Sec. 9. In case of a vacancy occurring in the office of chairman, or secretary
and treasurer, the trustees shall forthwith proceed to fill the same for the unex
pired term. In case of the temporary absence or inability to act of either the
chairman or secretary and treasurer, the trustees shall have power to appoint
one of their number to act in his stead pro tem.
Sec. 10. The governing committee of the exchange shall, at all times, have
the right to direct the production before it of the securities belonging to the
fund, the secretary’s book of minutes and the treasurer’s books of account.
It shall be the duty of the finance committee of the exchange to make an
annual examination of the condition of the fund; and it shall have the right
at any time to make such additional examination thereof as it may deem proper.
28 As amended Feb. 11, 1926.

STOCK EXCHANGE PRACTICES

A r t ic l e X X IV .—Definitions
S e o x io n 1 .

The following terms, as used in this constitution and in the rules
adopted pursuant thereto, shall, unless the context otherwise indicates, be
construed as follows:
(а) The rules of the exchange shall include the constitution and all rules
adopted pursuant thereto;
( б) The term “ security” or “ securities” shall include stocks, bonds, notes,
certificates of deposits or participation, trust receipts, rights, warrants, and
other similar instruments.**
(c)
The term “ the list” shall mean the list of securities admitted to deal*
ings on the exchange.
A r t ic l e

X X V .— Alterations of the constitution

The governing committee may make additions, alterations, or amendments to
the constitution by a majority vote of all its existing members. Every pro
posed addition, alteration, or amendment must be presented, in writing, at a
regular meeting of the governing committee, and referred to the committee on
constitution, which shall report thereon at the next regular meeting of the
governing committee, or at a special meeting expressly called for the purpose
of considering it. Action thereon may be postponed to a fixed date by a vote
of two-thirds of the members of the governing committee present Such addi
tions, alterations, or amendments when adopted by the governing committee
shall be posted on the bulletin board of the exchange and be submitted to
the exchange and if not disapproved by a majority vote of the entire member
ship within two weeks after the adoption thereof by the governing committee,
shall stand as the law of the exchange:
Provided, however, That if there shall be recorded less than a majority but
not less than 350 votes against an addition, alteration, or amendment, it
shall not go into effect unless and until it is thereafter approved by a vote of
two-thirds of the existing membership of the governing committee.
No alteration of Article X X II shall ever be made which will impair, in any
essential particular, the obligation of each member to contribute, as therein
provided, to the provision for the families of deceased members.
A r t ic l e

XXV I

1. The provisions of the constitution of the exchange in force im
mediately prior to the adoption of this constitution shall be superseded hereby,
except that such adoption shall not affect the liability of any member of the
exchange for any offense theretofore committed, or any rights or liabilities
theretofore acquired or incurred.
S e c t io n

R u l e s A d o pted b y t h e G o v e r n in g C o m m i t t e e P u r s u a n t t o t h e C o n s t it u t i o n

At a meeting of the governing committee held on April 23, 1926, the following
was adopted:
Resolved, That the exchange shall conform to New York City local time.
C h a p t e r I .—

Dealings upon the exchange

S e c t io n 1. Except as otherwise ordered by the governing committee, the
exchange shall be opened for the entrance of members upon every business
day at 30 minutes after 9 o’clock a. in.; at 10 o’clock official announcement
:shall be made that the exchange is open for the transaction of business, and
it shall so remain until 3 o’clock p. m., when it shall be officially announced
to be closed; except that on half holidays the closing shall be at 12 o’clock, noon.
S eo . 2. Dealings upon the exchange shall be limited to the hours during
which the exchange is open for the transaction of business; and a fine of $50
for each effense may be imposed by the committee of arrangements upon any
member who shall make any bid, offer, or transaction before or after those
hours. Loans of money or securities may be made after the official closing
of the exchange.

28As amended June 28, 1928.

STOCK EXCHANGE PRACTICES

Seo. 3. Only such securities, rights pertaining to securities, and securities on
a “ when issued ” basis as shall be admitted to dealing by the governing com
mittee, or pursuant to the eleventh and twelfth paragraphs of section 1,
Article X, of the constitution shall be dealt in on the exchange.
Sec. 4. N o member shall make, in the rooms of the exchange, a transaction
with a nonmember, in any security admitted to dealing on the exchange ; but
this rule shall not apply to transactions with the secretary or with a person
designated by the committee of arrangements for the purpose of closing con
tracts “ under the rule ” or with an employee of the exchange or of the Stock
Clearing Corporation engaged in carrying out arrangements approved by the
governing committee to facilitate the borrowing and lending of money.1
S e c . 5. All bids made and accepted and all offers made and accepted in ac
cordance with these rules shall be binding; and all contracts thereby effected
and all other exchange contracts shall be subject to the exercise by the govern
ing committee and the standing committees of the exchange of the powers in
respect thereto vested in the governing committee and in said standing com
mittees by the constitution of the exchange and to all provisions of said consti
tution and of the rules adopted pursuant thereto. Among the powers to the
exercise of which said contracts shall be subject as aforesaid are the powers of
the governing committee pursuant to section 2, 5, and 7 of Article III of the
constitution and of the powers of the committee on securities pursuant to subdiviison 11 of section 1 of Article X of the constitution; said contracts shall
also be subject to the power of the governing committee to declare any day to
be a holiday or to close the exchange by reason of any emergency or otherwise,
and to make such regulations in regard to deliveries as it may deem proper
because thereof; said contracts shall also be subject to the exercise by the
Stock Clearing Corporation of the powers reserved to said Stock Clearing Cor
poration by its by-laws and rules.
Se«. 6. The unit of trading in bonds shall be $1,000 in par value thereof.
The unit of trading in stocks shall be 100 shares; except that in the case of
inactive stocks, as designated by the committee of arrangements, the unit of
trading shall be 10 shares.2
Bids or offers for less than the unit of trading shall specify the par value
of the bonds or number of shares of stock covered by the bid or offer.
Sew. 7. Bids and offers may be made only as follows, and may be made
simultaneously, as being essentially different propositions, and may be accepted
without precedence of one over another, but when made without stated condi
tions shall be considered to be in the “ Regular way ” :
A. In stocks, securities of the United States, Puerto Rico, and the Philippine
Islands, and of States, Territories, and municipalities therein, and convertible
notes and bonds, except that the committee of arrangements may provide rules
relating to the bidding and offering of inactive stocks: 2
(a.) “ Cash,” that is, for delivery upon the day of contract.
(&) “ Regular way,” that is, for delivery upon the lull business day follow
ing the contract.
' (c) “At three days,” that is, for delivery upon the third day following the
contract.
(d) “ Buyer’s option ” or “ seller’s option,” for not less than 4 days nor more
than 60 days.
(e) “ When issued,” that is, for delivery when issued as determined by the
committee on securities.
B. In bonds (other than those mentioned in paragraph A, and such bonds as
may be designated by the committee of arrangements to be otherwise dealt in) : 3
(а) “ Cash,” that is, for delivery upon the day of contract.
(б) “ Next day,” that is, for delivery upon the full business day following
the day of contract.
(c)
“ Regular way,” that is, for delivery upon the full business day follow
ing the day of contract, except that when the seller states at the time of clos
ing the transaction on the floor of the exchange that the bonds are sold for
delayed delivery, said delivery shall be made on the seventh day following the
day of contract (unless such day is a holiday or half holiday, when section 8
of Chapter III shall apply), and may be made on any full business day prior
thereto upon one day’s written notice being given by the seller before 4.30
1 A s am en d ed D ec. 4 , 1929.
2 A s am ended Ju n e 9, 1926.

See n o te 4 on p. — .

STOCK EXCHANGE PRACTICES

p. m. 09 a fall business day or 1.30 p. m. on a half holiday, or intention so to
do. Said written notice may not be given on the day of contract.
(d) “ Buyer’s option,” that is, for not less than 2 days nor more than 60
days.
(e) “ Seller’s option,” for not less than 8 days nor more than 60 days.
(f ) “ When issued,” that is, for delivery when issued as determined by the
committee on securities.
On transactions for more than three days, but not including transactions in
bonds for delivery “ regular way,” as described in paragraph B, subparagraph
(0), written contracts shall be exchanged on the day following the transaction,
and shall not carry interest unless otherwise agreed; on such contracts one
day’s notice shall be given, at or before 2.15 p. m. on a full business day or
11.45 a. m. on a half holiday before the securities shall be delivered prior to the
maturity of the contract.*
On transactions in bonds, “ regular way, delayed delivery,” special contract
exchange tickets shall be exchanged on the day of the transaction, as provided
for in the rules of the Stock Clearing Corporation.
When written contracts shall have been exchanged the signers thereof only
are liable.
On offers to buy “ seller’s option ” or to sell “ buyer’s option,” the longest
option shall have precedence. On offers to buy “ buyer’s option” or to sell
“ seller’s option,” the shortest option shall have precedence.
Sec. 8. (a) The recognized quotations shall be public bids and offers on lots
of one trading unit of stocks or bonds, or multiples of either, as the case
may be.®
(&) All bids or offers for more than one trading unit of stocks or bonds
shall be considered to be for the amount thereof or any less number of units.
( 0) If a bid is made for a larger lot above the price at which smaller lots
are offered, or if a transaction is made in a larger lot above the price at which
smaller lots are offered, the bidder for the larger lot or the buyer of such
lot shall be compelled to buy any or all of the smaller lots which were pub
licly offered at the time, at the lower price, up to the amount of the larger lot.
If the bid for the larger lot is accepted and the buyer is unwilling to buy more,
the seller of the larger lot must give up to the members who were publicly
offering to sell at the lower price such amounts as they were publicly offering
to sell at the lower price if the claim is made immediately.
(d) If an offer is made to sell a larger lot below the price which is bid for
smaller lots, or if a transaction is made in a larger lot below the price which
is bid for smaller lots, the member offering to sell the larger lot or the seller
of such lots, shall be compelled to sell any or all of the smaller lots which
were publicly bid for at the time at the higher price, up to the amount of the
larger lot. If the offer of the larger lot is accepted and the seller is unwilling
to sell more, the buyer of the larger lot must give up to the members who
were publicly bidding the higher price such amounts as they were publicly
bidding for at the higher price if the claim is made immediately.
(e) A member may sell on offer the largest amount bid for without regard
to priority of bids. Should the offer be of an amount larger than the largest
bid, the balance shall go to the next largest bidder in sequence, bids for equal
amounts being on a parity.
A similar principle shall apply to buying on bids.
(f) A claim by a member who states that he had on the floor a prior or
better bid or offer shall not be sustained if the bid or offer was not made with
the publicity and frequency necessary to make the existence of such bid or
offer generally known at the time of the transaction.
(g) Disputes arising on bids or offers, if not settled by agreement between
the members interested, shall be settled, if practicable, by vote of the members
knowing of the transaction in question; if not so settled, it shall be settled by
any member of the committee of arrangements.
(h) This section shall not apply to lots of less than 100 shares of stock or
$1,000 par value of bonds, nor to active openings when bids and offers are
simultaneous, nor to specific classes of securities as to which the committee of
arrangements has made rulings regarding the method of dealing.4
2As amended June 9, 1926.
8 As amended Dec. 4, 1929.
119852— 33— a p p . ------ i

4 As amended June 9, 1925.

STOCK EX C H A N G E PRACTICES

Sec. 9. Bids or offers shall not be made at a less variation than one-eighth oJ
$1 in stocks and one-eighth of 1 per cent of the par value of bonds: Provided,
however, That the committee of arrangements may from time to time, in its
discretion, determine that transactions may be made at variations less than
the above, fixed by said committee, on transactions in foreign and domestic
government bonds and notes, State, county, and municipal securities, shorttime bonds and notes of corporations, or on rights and stocks selling at a
price of one-eighth or less, which said variations shall thereafter be in effect
and be reported to the governing committee.5
Seo. 10. The offering in a public manner—
(а) To buy or sell securities “ on stop,” above or below the market, or
(б) To buy or sell securities “ at the close ” is forbidden
Sec. 11. No offers to buy or sell privileges to receive or deliver securities
shall be made publicly on the exchange.
Seo. 12. A member violating any provision of sections 6, 7, 8, 9, 10, or 11 of
this chapter, or of any ruling made by the committee of arrangements
regarding the method of dealing in securities or the quoting thereof, shall be
fined by said committee in a sum not exceeding $250 or said committee may
report the member to the governing committee, who may fine him in a sum
not exceeding $250 or suspend him for a period not exceeding 60 days.'
Sec. 13. When a member has an order to buy and an order to sell the same
security he must offer such security, if bonds at one-eighth of 1 per cent and
if stocks at one-eighth of $1 higher than his bid before making a transaction
with himself, if not so already bid or offered.
Sec. 14. No party to a contract shall be compelled to accept a substitute prin
cipal unless the name proposed to be substituted shall be declared in making the
bid or offer and as a part thereof.
Sec. 15. Members of the exchange and firms registered thereon, unless ex
empted from the provisions hereof by the committee on quotations and com
missions, shall cause to be kept in their offices a record of the time of day at
which all transactions take place in securities admitted to dealings on the
exchange.3
Chapter II.—Exchange of tickets; comparisons
Section 1. It shall be the duty of every member to report each of his trans
actions as promptly as possible at his office, where he shall furnish opportunity
for prompt exchange of tickets or comparison.
Sec. 2. An exchange of tickets shall be made in the manner required by the
by-laws and rules of the Stock Clearing Corporation and shall constitute a
comparison. In all cases in which an exchange of tickets or special contract
exchange tickets is not so required comparisons shall be made by an exchange
of an original and a duplicate comparison ticket; the party to whom the com
parison ticket is presented shall retain the original, if it be correct, and imme
diately return the duplicate duly signed.
Sec. 3. It shall be the duty of the seller to exchange tickets or to make
comparison in respect to each transaction at the office of the buyer not later
than one hour and a half after the closing of the exchange, except as may
otherwise be prescribed by the by-laws and rules of the Stock Clearing Cor
poration. Nothing in these rules shall be construed to justify a refusal to
compare before the closing of the exchange.
Sec. 4. It shall be the duty of the buyer to investigate before 10 o’clock a. m.
of the day after the purchase each transaction which has not been compared
by the seller.
Sec. 5. On contracts other than those on which delivery is required to be
made in accordance with the by-laws and rules of the Stock Clearing Corpora
tion, when delivery has not been made, it shall be the duty of the buyer to
send to the seller a “ fail to deliver ” ticket not later than 10 o’clock a. m.
on the day following the day on which delivery was not made in accordance
with the terms of the contract; such ticket shall be in duplicate; the party to
whom the ticket is presented shall retain the original, if it be correct, and
immediately return the duplicate duly signed.
Sec. 6. Neglect of a member to comply with the provisions of sections 1, 2,
3, 4, or 5 of this chapter shall render him liable to such fine, not exceeding
2 As amended June 9, 1926.
3 Spe note 2, p. — .

5 See note 3, p. — .

STOCK EX CH A N G E PRACTICES

$250, as may be imposed by the committee of arrangements, unless such neglect
consists in the failure to observe the by-laws and rules of the Stock Clearing
Corporation, in which case the matter shall be dealt with by the Stock Clearing
Corporation.
SEC'. 7. The neglect or failure of a member to exchange tickets on a contract
in cleared securities as defined in the by-laws and rules of the Stock Clearing
Corporation, which contract is to be cleared through said corporation, shall
constitute a default; and such defaulted contract shall be closed as provided
in Chapter IV hereof, except that the limit of time for delivery of notice
of intention to close such contract shall be 10.30 o’clock a. m. of the following
business day, and the time of closing shall not be before 11 o’clock a. m.
Sec. 8. An original party to a transaction who has acted therein as broker
for another member or members may give up to the other original party to
said transaction the name or names of such other member or members, but
such giving up or the acceptance of such give up or give ups shall not con
stitute a substitution of principals. The member or members so given up_ shall
have the same duties in the matter of comparison as devolve upon original
parties; and no original party shall refuse to compare with the member or
members so given up.
Orders issued by the Stock Clearing Corporation for the receipt or de.ivery
of securities shall be binding and enforceable upon members or firms for whom
the Stock Clearing Corporation acts.
Seio. 9. No exchange of tickets or comparison or failure to exchange tickets
or to compare, and no notification or acceptance of notification, such as noti
fication of failure to receive or failure to deliver, shall have the effect of
creating or of canceling a contract, or of changing the terms thereof, or of
releasing the original parties from liability, except that special contract
exchange tickets exchanged pursuant to section 7 of Chapter I shall constitute
contracts. When a mistake in an exchange of a ticket or a comparison or in
notification of failure to receive or of failure to deliver is made, either by
a member in person or by any of his partners or clerks, thereby causing a
loss to another member, or when a failure to promptly fulfill the duties imposed
upon a member by any of the above rules causes a loss to another member,
the member sustaining the loss may bring a claim before the arbitration com
mittee, joining as defendants, if he so elects, any or all of the members con
cerned, which committee may render such decision against any or all of the
defendants as the facts in the case may warrant.
S e o . 10. The price at which an order is executed on the exchange shall be
binding, notwithstanding the fact that an erroneous report in respect thereto
may have been rendered; and no member shall assume or pay any part of the
difference between the price at which an order is executed and the price at
which it may have been erroneously reported.1
C h a p te r

III.—Payent and delivery; settlement of contracts; stamp taxes

S e c t i o n 1. In all deliveries of securities, the party delivering shall have the
right to require the purchase money to be paid upon delivery; if delivery is
made by transfer, payment may be required at time and place of transfer;
provided, however, that payment on deliveries through the Stock Clearing Cor
poration shall be made in conformity with the by-laws and rules of said Stock
Clearing Corporation.
Seo. 2. The receiver of shares of stock shall have the option of requiring
the delivery to be made either in certificates therefor or by transfer thereof;
except that in cases where personal liability attaches to ownership, the seller
shall have the right to make delivery by transfer.
If the receipt or delivery is made through the Stock Clearing Corporation
the right to require receipt or delivery by transfer shall be’ exercised only as
prescribed in the rules of said Stock Clearing Corporation.
The right to require receipt or delivery by transfer shall not obtain while the
transfer books are closed.

Seo. 3. The buyer must, not later than 2.15 o’clock p. m. on any full business
day, accept and pay for all of a lot of stock contracted for, or any portion of a
lot which may be tendered in accordance with the terms of the contract and
1 As amended June 9, 1926.

STOCK E X CH A N G E PRACTICES

the rules of the exchange and of the Stock Clearing Corporation in lots of one
trading unit or multiples thereof; and he may buy in, as provided in Chapter
IV hereof, the undelivered portion.1
This rule shall also apply to contracts for bonds, when tender is made in
lots of $1,000 par value or multiples thereof; except that on bonds sold “ delayed
delivery ” the full lot must be tendered unless otherwise mutually agreed.
Seo. 4. Deliveries of securities on a full business day must be made before
a quarter after 2 o’clock p. m., and if a delivery is not made by that time the
contract may be closed as provided in Chapter IV hereof. In the absence of
any notice or agreement, the contract shall continue without interest until the
following full business day; but in every case of nondelivery of securities the
party in default shall be liable for any damages which may accrue thereby; and
all claims for such damages must be made before 3 o’clock p. m. on the business
day following the defkult.
Seo. 5. On half holidays observed by the exchange, securities sold specifically
for “ cash ” must be delivered and received at or before 11.30 o’clock a. m. In
case of default the contract may be closed after 11.40 o’clock a. m., as provided
in Chapter IV hereof.
Seo. 6. Parties receiving securities shall not deduct from the purchase price
any damages claimed for nondelivery, except by the consent of the party
delivering the same.
Seo. 7.2 Notice for the return of loans of money or of noncleared securities
as defined in the by-laws and rules of the Stock Clearing Corporation, must be
given before 12.15 o’clock p. m. of the day on which the return is to be made.
Notice for the return of loans of cleared securities, as defined in the by-laws
and rules of the Stock Clearing Corporation, must be given before 3.45 o’clock
p. m. of the full business day preceding the day on which the return is to be
made; on half holidays observed by the exchange such notice must be given
before 12.45 o’clock p. m. All such notices shall be considered as in full force
until delivery is made.
Seo. 8. All contracts “ at three days ” and “ buyer’s ” and “ seller’s ” option
falling due on holidays or half holidays observed by the exchange shall be set
tled on the preceding full business day, except that when two or more consecu
tive days are holidays or half holidays, contracts falling due on other than the
first of such days shall be settled on the next full business day.
All contracts “ regular way ” falling due on holidays and half holidays
observed by the exchange shall mature on the succeeding full business day,
unless otherwise specified.

Loans of money or securities made on the day preceding a holiday or half
holiday observed by the exchange shall mature on the succeeding full business
day unless otherwise specified.
Seo. 9. When a disagreement arising from a transaction in securities shall
be discovered, the money difference shall forthwith be established by purchase
or sale.. or by mutual agreement.
Seo. 10. Each delivery of securities subject to a tax on transfer or sale must

be accompanied by a sales ticket stamped in accordance with the regulations
of the United States and the State of New York, except that in the case of
securities cleared by or deliverable through Stock Clearing Corporation sales
tickets so stamped shall be delivered in accordance with the by-laws and rules
of Stock Clearing Corporation.8
Chapter IV.— Closing contracts
Section 1. When announcement is made of the suspension of a member or
firm pursuant to the provisions of Article XVI of the constitution, members
having exchange contracts with the member or firm shall without u n n e c e s s a r y
delay proceed to close the same on the exchange or in the best available market,
except in so far as the by-laws and rules of the Stock Clearing Corporation are
applicable and provide the method of closing. Should a contract not be closed,
as above provided, the price of settlement for the purposes of section 3
Article XIV of the constitution shall be fixed by the price current at the time
when such contract should have been closed under this rule.
Sec. 2. A contract in listed securities which has not been fulfilled according
to the terms thereof may be officially closed by the secretary, or by a member of
1Adopted Aug. 10, 1927.
2 As amended Feb. 25, 1932.

8 As amended Apr. 23, 1930.

STOCK EX CH A N GE PRACTICES

the committee of arrangements, or by a person designated by the committee of
arrangements, as provided in these rules.4
The order to close such contract shall be delivered to the secretary and the
notice of intention to make such closing must be delivered at the registered
address of the member or firm in default; the order to close and the notice of in
tention to close shall be delivered at or before 2.30 p. m., on any day, but such
contract shall not be closed before 2.35 o’clock p. m .; except that on half-holi
days observed by the exchange contracts relating to securities sold specifically
“ for cash ” may be closed in the manner provided by section 5 of Chapter III.
The member or firm for whose account a contract is being closed shall not be
permitted to accept the bid or offer.
Seo. 3. Every order to close or notice of intention to close a contract, be
cause of nondelivery, shall be in writing, and shall state the name of the mem
ber or firm by whom the order is given, the date of the original contract to be
closed out, and for whose account—all of which shall be announced before
closing the contract.4
The closing of a contract made in conformity with such notice shall be also
for the account and liability of each succeeding party in interest.
Seo. 4. Notice of intention to close a contract may be given upon the entire
amount in default or upon any portion thereof, but in this latter case for not
less than one trading unit.1
Seo. 5. When notice that a contract will be closed is received too late for
transmission to other members or firms interested in such contract, within the
times stated therefor, the notified member or firm who is unable to so transmit
said notice may, immediately after the official closing, reestablish such contract
by a new purchase or sale in the “ regular way,” and any loss arising there
from shall be a valid claim against the successive party or parties in interest.
Seo. 6. When a member has issued a notice of intention to close a contract
for default in delivery, he must receive and pay for securities due upon such
contract if tendered at his office by 2.30 o’clock p. m., or thereafter if notice is
given to the secretary before said contract is closed that the securities are in the
physical possession of the member for whose account the contract is being
closed and have been or will be tendered, before said closing, at the office of the
member giving said order to close the contract.
Sjeo. 7. When a contract has been closed, the member or firm who gave the
order must give prompt notice of such closing to the member or firm in default.
Notification to successive parties in interest must be transmitted without
delay, and claims for damages, arising therefrom, must be made prior to 3
o’clock p. m. of the business day following the closing of the contract.
S eo. 8. When a contract has been closed, there shall be indorsed upon the
order therefor the name of the purchaser or seller, the price and the hour at
which such contract was closed, and the secretary shall thereafter ascertain
whether the money difference, if any, has been paid. If such difference shall
not be paid within 24 hours after the closing the the contract, the secretary
shall report such default to the president.
S e c . 9. When a contract is closed, any member or firm accepting the bid or
offer, and not complying promptly therewith, shall be liable for any damages
resulting therefrom.
Seo. 10. When a loan of money is not paid at or before 2.15 o’clock p. m. of
the day upon which it becomes due, the borrower shall be considered as in
default, and the lender may, without notice, sell the securities pledged therefor,
or so much thereof as may be necessary to liquidate the loan, in the manner
prescribed in the foregoing rules.
Seo. 11. A contract in securities not dealt in on the exchange which has not
been fulfilled according to the terms thereof may be closed on the best available
market by the party thereto who is not in default. Otherwise the rules con
tained in this chapter applicable to the closing of contracts of listed securities
shall be followed as nearly as may be.
Sec. 12. When securities listed on the exchange are stricken from the list or
trading therein is suspended by the governing committee, and in any case in
which, in the opinion of the governing committee, there is no fair market in any
security, the governing committee may provide that contracts therein shall not
be closed under the provisions of this chapter until the governing committee
has determined that there is a fair market in which the same may be closed.
1 As amended June 9, 1926.

4 As amended July 11, 1928.

STOCK EX CH A N G E PRACTICES
C h a p ter

V.1—Marking to the market

l.2 The party who is partially unsecured by reason of a change in the
market value of the subject of an exchange contract may demand from the other
party the difference between the contract price and the market price. Such
difference shall bear interest at the current renewal rate for call loans except in
the case of a contract for the borrowing and loan of securities when such differ
ence shall be considered part of such loan. The party from whom such differ
ence is demanded shall immediately either (a) pay the same directly or through
Stock Clearing Corporation to the party who is partially unsecured, or (b)
deposit the same with Stock Clearing Corporation if permitted by its by-laws
and rules.
The holder of a duebill may require the maker of the duebill to deposit the
full amount due thereon with the Stock Clearing Corporation, and, where said
duebill is for securities or for lights, the holder may require the deposit of the
market value thereof and either the holder or maker of said duebill may require
that it shall thereafter be kept marked to the market.
All demands for the difference between the contract price and the market
price or for deposits on duebills shall be made during the hours during which
the exchange is open for business^ shall be in writing, and shall be delivered at
the office of the party upon whom the demand is, made, and shall be complied
with immediately.
If the party making a deposit with the Stock Clearing Corporation is not a
clearing member as defined in the by-laws of the Stock Clearing Corporation, he
shall cause the deposit to be made for him by a clearing member. The cash
so deposited with the Stock Clearing Corporation shall be held by it subject to
its by-laws and rules.
Sew. 2. Failure of either party to a contract or of either the holder or the
maker of a duebill to comply with the provisions of this chapter shall be a
failure to fulfill a contract according to its terms.
S e c tio n

C h a p t e r , Y I .—

Transfers for dividends; Interest on bonds, etc.

S e c t i o n l.3 Transactions in shares shall be ex-dividend or ex-rights, as the
case may be, on the record date as fixed by the corporation or on the day of the
closing of transfer books therefor, except transactions therein made specifically
for “ cash.” Such such record date or such closing of transfer books occur upon
a holiday or half-holiday observed by the exchange this rule shall apply for the
preceding full business day. The committee on securities may, however, in any
particular case direct otherwise.
SEc. 2.3 The buyer shall be entitled to receive all dividends, rights, and
privileges, except voting power, which may pertain to securities contracted for,
for which a record date is fixed by the corporation or the transfer books shall
close during the pendency of the contract.
When such contract shall mature before the date fixed for payment of such
dividend there shall be delivered for such dividend a duebill signed or guaran
teed by a member.
Duebills for dividends shall be redeemable on the date the dividend is paid.
When a security is sold before the day on which it is quoted “ ex-rights ” and
is delivered thereafter, the buyer shall, on its delivery, pay only the market
price of the security “ ex-rights.” He shall pay the balance due on the contract,
when the seller delivers the “ rights,” at any time on or before the day set by
rhe committee on securities for settlement of contracts in said “ rights.”
When a security is loaned before the day on which it is quoted “ ex-rights,”
and is returned thereafter, the lender shall on its return pay only the market
price of the security “ ex-rights.” He shall pay the balance due on the contract,
when the borrower delivers the “ rights,” at any time on or before the day set
by the committee on securities for settlement of contracts in “ rights.”
The foregoing shall also apply in the case of stock or scrip dividends, except
that such stock or scrip dividends shall be due and deliverable on the distribu
tion date thereof.
S e c . 3. (a) In settlement of contracts in interest-paying bonds there shall be
added to the contract price interest at the rate specified in the bond, which

1As amended Aug. 26, 1931.
2 In effect Sept. 29, 1927.

3As

amended Dec. 4, 1929.

STOCK EX CH A N G E PRACTICES

shall be computed up to but not including the day of maturity of contract in all
cases except “ time-option ” contracts and regular way delayed delivery ” con
tracts.
(&)
On a contract in interest-paying bonds, “ seller’s, or buyer’s option” at
a rate agreed upon (as seller or buyer 20, 2 per cent), the interest specified in
the bond shall be computed to and including the day of sale; and thereafter
interest at the agreed rate shall be computed on the contract price plus accrued
interest. An agreed rate of interest must be computed for actual elapsed days.
On a contract in interest-paying bonds “ regular way delayed delivery,” interest
at the rate specified in the bond shall be computed up to but not including the
next “ delivery day ” following the date of the transaction and shall be “ flat ”
thereafter unless otherwise agreed.
(c) Bonds selling “ and interest" shall so continue until, in the event of a
default, the committee on securities rules otherwise.
(d) Bonds upon which the interest is in default shall carry all unpaid
coupons.
(e )1 Registered bonds shall not sell ex-interest on the day the books close
for payment of interest. In settlement of contracts in interest-paying registered
bonds, interest must be added to the date of maturity of contract, and a duebill, signed by the party in whose name the bond stands or by a member or his
firm for the full amount of the interest to be paid by the company, must accom
pany the bond until interest is paid; the duebill issued by a nonmember must
be paid when due by the member or firm guaranteeing it.
(f) 1Interest at the rate specified in an interest-paying bond shall be com
puted on a basis of a 360-day year, i. e .:
Every calendar month is one-twelfth of 360 days—30 days.
Every period from a date in one month to the same date in the following
month is 30 days.
( g) 1 Income bonds, unless otherwise directed by the committee on securities,,
shall be dealt in “ flat.”
(h) Bonds or notes dealt in flat shall be ex-interest as directed by the com
mittee on securities.
Sec. 4. A charge of 1 per cent may be made for the delivery of dividends or
rights pertaining to securities which the holder has failed to transfer. For
stock or scrip dividends or rights the charge shall be computed on the market
value thereof at the time of the closing of the transfer books.
No charge shall be made for collecting dividends or rights accruing on securi
ties deliverable on a contract.
Sm 5. When securities are borrowed or loaned the sum agreed upon, either
as interest for carrying or as premium for use, shall be paid whether such
securities are delivered or not.
Sec. 6.2 Unless otherwise agreed, all loaned securities shall carry the renewal
rate of interest or the renewal premium established on the floor of the ex
change, for the securities in question.
Sec. 7. Where a member has contracted to borrow money on collateral, the
simple payment of interest by the borrower, after 3 o’clock p. m., without
actually effecting or properly endeavoring to effect the loan, shall be held to be
an evasion of the contract, and is forbidden.
C h a p ter

YII.— Commissions

In transactions where orders are received from a nonmember, and
the broker filling the order is directed to give up another broker or clearing firm,
the responsibility for collecting the full commission specified in section 2,
Article X IX of the constitution, shall rest with the broker or clearing firm
settling the transaction.
Sec. 2. In transactions where orders are received from a member, and a
clearing firm is given up by said member or by his order, the responsibility
of collecting the full commission specified in section 2, Article XIX, of the
constitution shall rest with said clearing firm; and it shall be the duty of the
broker who executes such orders to report the transactions to the clearing
firm and render his bill to them therefor at the rates specified; a broker who
S e c t i o n 1.

1 As amended Dec. 4, 1929.
a As amended June 24, 1931— effective June 29, 1931.

STOCK EX CH A N GE PRACTICES

executes an order for a member and clears the security himself must charge
the rates specified in said section.
Seo. 3.1 When a nonmember shall cause to be executed in a market not in
the United States or Canada an order for the purchase or sale of securities
listed on this exchange, and said purchase or sale shall be accepted by a mem
ber of this exchange, or firm registered thereon, for the account of said non
member, the commission specified in section 2, Article XIX, of the constitution
shall be charged the nonmember in addition to any commission charged by the
party or parties making the transaction.
Sec. 4. When securities are received or delivered for a nonmember, on a
privilege, the commission specified in paragraph (a) of section 2, Article XIX,
o f the constitution must be charged.
Seo. 5. When a member receives and delivers securities for another member,
the clearing charge for said service may be a matter of mutual agreement,
said charges to be based upon a stipulated sum of money for each 100 shares of
stock or $1,000 of bonds; the payment of a certain sum of money for any
period of time for said service, irrespective of the number of shares or amount
of bonds cleared, is forbidden.
Sec. 6. N o member shall without commission or for a nominal commission,
transact or offer to transact for any customer who is dealing in securities dealt
in on the exchange, any business in cotton, grain, produce, or other commodities.

Seo. 7. No member shall agree to give reciprocal business in cotton, grain,
produce, or other commodities, dependent upon the amount of business received
by him in securities dealt in on the exchange.
Sec. 8. The execution of “ bunched ” orders, without the charging of the re
quired commission, is forbidden.

Seo. 9. Any agreement or arrangement between a member and his customer,
whereby special and unusual rates of interest are given or money advanced
upon unusual terms, with intent to give special or unusual advantage to such
customer, for the purpose of securing his business, is forbidden.
Transactions in securities dealt in on the New York Stock Exchange being
based on delivery and settlement in New York City, all payments with respect
thereto must be madf* accordingly.
If settlements with customers in the case of sales by them are made at any
time prior to the actual date of settlement in New York or at any time subse
quent thereto in the case of purchases, interest, at not less than the approxi
mate ruling rates for money, for the full time involved must be deducted or
added as the case may be.
In transactions where the amount of interest is less than $1, the collection of
the interest involved may be waived at the discretion of the member. Any abuse
of this privilege may be held to be an act detrimental to the interest and wel
fare of the exchange.2
Sec. 10. An allowance for interest on short sales of stock shall not be more
than the loan market rates for the stocks borrowed or used for such short sales.
Sec. 11. No member shall make any transaction in a listed security “ over the
counter ” for his own account, or the account of his firm, or for that of a part
ner, or for any account in which either he or they have a direct or indirect
interest, and a reverse operation upon the exchange at or about the same time,
wherein the difference between the purchase and sale prices is less than the
recognized commission on such a purchase or sale.

Sec. 12. No member shall, directly or indirectly, by agreement or otherwise,
assume or bear for his own account or relieve his principal from any part of
any stamp tax imposed by the United States or by any State on transfers or
sales of securities.
Seo. 13. No member shall assume for his own account or for the account of
his firm, a contract made for a customer after a loss to the customer has been
established or ascertained unless the contract was made by mistake or unless
the consent of the committee on quotations and commissions has first been
obtained.3
C h a p t e r VIII.—Advertising*
S e c t i o n 1. N o member shall publish an advertisement of other than a strictly
legitimate business character.

1 As amended Nov. 23, 1927.
* Amended May 25, 1927.
s Adopted Oct. 26, 1927.
* See sec. 8 of Ch. XIII regarding advertising by radio.

STOCK EXCH A N GE PRACTICES

Seo. 2. Every advertisement of a member, unless it is in a general form ap
proved by the committee on business conduct, must, before publication, receive
the approval of said committee.
Sec. 3. Every advertisement of a member offering to make purchases or sales
of listed securities, must, before publication, in addition to the approval re
quired by section 2, receive the approval of the committee of arrangements.
C h a p t e r I X . —Visitors;

communications

1. Visitors shall not be admitted to the floor of the exchange except
by permission of the president or the committee of arrangements.
Seo. 2. Communications shall not be read to the exchange without the con
sent of the president or the committee of arrangements.
S e c tio n

Chapter

X.—Arbitrage; continuous quotations

S e c t i o n 1. Arbitrage, or trading between this exchange and that of any
other city in the United States, based on quotations made on the floor of the
exchange, is forbidden.
Sec. 2. The sending, from the floor of the exchange, of continuous quotations
is forbidden. Continuous quotations are successive quotations occurring at
intervals of 15 minutes or less.
Sec. 3. The committee of arrangements is charged with the enforcement of
the above rules, the prevention of such business or trading, and the sending of
such quotations, and with the bringing of charges against any member engaging
therein.
Sec. 4. Members who propose to operate in joint-account arbitrage between
this exchange and foreign cities shall file with the secretary of the exchange a
statement giving the names and addresses of all parties to the joint account,
with a copy of all agreements bearing thereon, which shall include a statement
of the proposed division of the profits from said account; and said members
shall obtain the approval of the committee on quotations and commissions.
Sec. 5. All subsequent changes in agreements shall be submitted to said
committee.
Sec. 6. A transaction, once originated for the joint account, shall not be
canceled or assumed by another account or principal.
Seo. 7. All securities purchased or sold by either party to the joint account
shall be reported at the actual price at which the transaction occurred.
Sec. 8. On securities which are permitted to be dealt in on this exchange, the
joint account shall be charged the regular commission, both here and abroad.
Sec. 9. The basis on which commissions on nonlisted securities are to be
charged shall be reported to said committee.
Sec. 10. The expense of cables, insurance, and similar charges is to be
charged to the joint account.
Sec. 11. Monthly and other accounts of both parties to the joint account, and
all orders, reports, documents, and original cables pertaining to the joint ac
count, shall be kept on file in the New York office of the member of the exchange,
separately and distinctly from all other business, and shall be subject to the
inspection of said committee.
C h a p t e r X I . —Members

dealing for their own account

Section 1. No member, while acting as a broker, whether as a specialist or
otherwise, shall buy or sell directly or indirectly for his own account or that
of a partner, or for any account in which either he or a partner has a direct or
indirect interest, securities the order for the sale or purchase of which has been
accepted by him or his firm or a partner for execution; except as follows:
Exception (a) : A member who, by reason of his neglect to execute an order,
is compelled to take or supply on his own account the securities named in the
order, is not acting as a broker, and shall not charge a commission.
Exception (b) : A member may take or supply the securities named in the
order provided the price is justified by the condition of the market and provided
that the member who gave the order shall directly, or through a broker author
ized to act for him, after prompt notification, accept the trade and report it.
Exception (c) : A member, acting as a broker, is permitted to report to his
principal a transaction as made with himself when he has orders from two

STOCK EXCH A N GE PRACTICES

principals to buy and to sell and not to give up, such orders being executed in
accordance with section 13 of Chapter I, in which case he must add to his name
on the report the words “ on order.”
Seo. 2. When a member either takes the book of a specialist temporarily or an
order from another member, he shall, while he is in possession of that book or
order and for the balance of that particular day, stand in the same relationship
to the book or order as the specialist or other member himself.
C h a p ter

X II.—Conducting of accounts

Section 1. The acceptance and carrying of an account for a customer,

whether a member or a nonmember, without proper and adequate margin,
may constitute an act detrimental to the interest or welfare of the exchange.
Seo. 2. The improper use of a customer’s securities is inconsistent with just
and equitable principles of trade.
Seo. 3. Reckless and unbusinesslike dealing is inconsistent with just and
equitable principles of trade.
Seo. 4. An agreement between a member and a customer, authorizing the
member to pledge securities, either alone or with other securities carried for
the account of the customer, either for the amount due thereon or for a greater
amount or to lend such securities, does not justify the member in pledging or
loaning more of such securities than is fair and reasonable in view of the in
debtedness of said customer to said member.
Sec. 5. No form of general agreement between a member and a customer
shall warrant the member in using securities carried for the customer for
delivery on sales made by the member for his own account, or for any account
in which the firm of said member or any general or special partner therein is
directly or indirectly interested.
Seo. 6. An arrangement by a member for the purchase of securities for
account of a customer, to be paid for by the customer on installments or by a
series of partial payments, under which the charge for purchasing and carrying
any such securities is unreasonable, is an act detrimental to the interest or
welfare of the exchange.
Seo. 7. No member shall take or carry a speculative account or make a specu

lative transaction in which an employee of the exchange, or of a member of
the exchange, or of a firm registered thereon, or of a bank, trust company,
insurance company, or of any corporation, firm, or individual engaged in the
business of dealing, either as broker or as principal, in stocks, bonds, or other
securities, bills of exchange, acceptances, or other forms of commercial paper
is directly or indirectly interested unless the written consent of the employer
has first been obtained. An employee of a corporation of which the exchange
owns a majority of the capital stock shall be deemed an employee of the
exchange within the meaning of this section.
Seo. 8.1 No member shall transact any speculative business with or for any
telephone clerk employed within the exchange building, whether said clerk be
his own employee or an employee of a fellow member, either for the account of
said clerk or for the account of any other person.
Sec. 9.2 No member or firm shall give to an employee on the floor of the
exchange discretion to give orders for the purchase or sale of securities, nor
shall any such employee exercise such discretion.
Sec. 10. Every member is required to use due diligence to learn the essential
facts relative to every customer and to every order or account accepted by
him; also as to the possible use of a name for the account other than that of
the party interested.
Sec. 11. No member shall be directly or indirectly interested in or associated
in business with, or have his office directly or indirectly connected by public or
private wire or other method or contrivance with, or transact any business
directly or indirectly with, or for—
(1) Any bucket shop; or
(2) Any organization, firm, or individual making a practice of dealing on
differences in market quotations; or
(3) Any organization, firm, or individual engaged in purchasing or selling
securities for customers and making a practice of taking the side of the market
opposite to the side taken by customers.
1 As amended July 13, 1927.

2 Adopted Nov. 28, 1928.

STOCK EX CH A N GE PRACTICES
Chapter

X III.—Wire <md other connections

Section 1. The privilege of telephonic or other wire connection between the
office of a member and the exchange shall not be enjoyed as a right of the mem
ber but shall rest in the discretion of the committee of arrangements or of the
governing committee on an appeal from decision of the committee of arrange
ments. No appeal shall, however, suspend the operation of said decision.
The committee of arrangements, in its discretion, may grant or withhold such
privilege from a member, and, in its discretion, without being obliged to assign
any reason or cause for its action, may disconnect or cause to be disconnected
any apparatus or means for such communication or may deprive any member
of the privilege of using any public telephone or means of communication
installed by the exchange for the use of members.
Sejc. 2. Every decision of said committee whereby a member is deprived of
any such privilege shall be immediately posted upon the bulletin board in the
exchange, and every member shall be deemed to have notice thereof.
No member shall, after such notice shall have been posted, directly or in
directly furnish to the member named therein any facilities for communication
between the office of the member so named and the floor of the exchange or
between the office of the member so named and the office of any other member.
Sec, 3. No member shall establish or maintain wire connection of any de
scription whatsoever or permit wireless communication between his office and
the office of any nonmember corporation, firm, or individual transacting a
banking or brokerage business without having first obtained the approval of
the committee on quotations and commissions therefor.
The applications for such connections or means of communication shall be in
a form prescribed by said committee.
The use of public telephone or telegraph service in such manner as to amount
to private connection shall be deemed to be within this rule.
Sec. 4. Every such means of communication shall be registered with said
committee, together with the telegraphic, telephonic, or wireless calls used in
connection therewith; said committee may make such regulations governing
said matters as it shall deem necessary or desirable.
S e c . 5. Notice of the discontinuance of any such means of communication
shall be promptly given to said committee; and said committee shall have
power, at any time in its discretion, to order any such means of communication
discontinued.
Sec. 6. No such communication shall be other than by means of a wire or
wireless system approved by said committee.
Seo. 7. Every operator employed by either the member or the nonmember shall
be registered with said committee, and no such operator shall be employed
unless approved by said committee.

Sec. 8. The approval of said committee shall be requisite to the use of a
wireless system between the office of a member and any other of his offices ;
and said committee may, at any time in its discretion, order such means of
communication forthwith discontinued.
No member shall make use of wireless to transmit or broadcast market
information or forecasts of business, or financial conditions or for any advertis
ing purpose, or to stimulate interest in particular securities or in the market;
Provided, however, That members may supply quotations to broadcasting sta
tions which have been approved by the committee on quotations and com
missions at such intervals and under such regulations as are prescribed by said
committee.
Sec. 9. No member shall, directly or indirectly, pay the cost of operators
or any other expense pertaining to the office of a nonmember; except that said
committee may permit the payment by a member of part or all of the cost of
such means of communication between an office of a member and a nonmember
as has been approved by the committee on quotations and commissions.
Seo. 10. For each office of a nonmember engaged in the brokerage business
where said office is connected in accordance with these rules with an office of
a member, there shall be paid to the treasurer of the exchange the sum of
$10 in respect to every month in which any stock or bond business has been
transacted at said office; said sum shall be collected from the nonmember by
the member designated so to do by the committee on quotations and commis
sions ; but said member may, if he so elect, make such payment, or prorate the
charge with the nonmember or with other members connected in accordance
with these rules with said nonmember.

STOCK EX C H A N G E PRACTICES

(Referring to section 10, Chapter XIII, of the rules (p. 113 of the constitu
tion and rules), the committee on quotations and commissions, acting under
the authority of the governing committee, has ruled that commencing January
1 next, and until further notice, the monthly wire charge provided for under
the above-mentioned rule will be waived. December 11, 1925.)
C hapter

XIV.—Miscellaneous prohibitions

Section 1. When securities are offered for subscription by a member, and
the invitation to subscribe states the amount thereof to be presently offered,
it is not consistent with just and equitable principles of trade for such mem
ber to deliver said securities to an amount greater than that stated in said
invitation to subscribe.
Sec. 2.1 No member or firm registered on the exchange shall be associated with
an investment trust, whether management, restricted management or fixed type,
either by participating in its organization or management or by offering
or distributing its securities, unless the committee on stock list shall have
previously determined that it has no objection to such association and shall not
have changed such determination.
Sec. 3. The direct or indirect employment of representatives of the press by
a member, for the purpose of obtaining advance or confidential information,
is forbidden.
Sec. 4. The circulation in any manner of rumors of a sensational character
by a member, in any case where such act does not constitute fraud or conduct
inconsistent with just and equitable principles of trade, in an act detrimental to
the interest or welfare of the exchange.
Members shall report to the secretary of the exchange any information which
comes to their notice as to the circulation of such rumors.
Sec. 5. No member of the exchange shall employ any employee of the exchange
or any employee of any corporation of which the exchange owns a majority
of the capital stock, for any service outside of the hours of regular employment
by the exchange or such corporation, without having first obtained the ap
proval therefor of the committee of arrangements or of said corporation as
the case may be, and registering therewith the name of said employee, the
nature of the services rendered, and the amount of said compensation.
No member shall give any compensation or gratuity to an employee of the
exchange or to an employee of another member of the exchange unless the
giving of such compensation or gratuity be first submitted in writing to the
committee of arrangements and approved. And no member shall give any
compensation or gratuity to an employee of the Stock Clearing Corporation
unless the giving of such compensation or gratuity be first submitted in writing
to said corporation and approved.
Employees of he exchange are forbidden to accept any compensation or gratu
ity from any member of the exchange for any service rendered or to be rendered
except when said compensation or gratuity has been approved by the committee
of arrangements.
Sec. 6. Public announcement by a stock exchange firm or one of its members
regarding moneys held for the purpose of betting on elections or on any other
matters is prohibited.
Sec. 7. Offers on the exchange to buy or sell dividends or to bet upon the
course of the market are prohibited.
Sec. 8. No member shall purchase the stamps required by law to be affixed
to deliveries and transfers from other than the agencies designated by law.
Seo. 9.2 No member shall reopen a contract which is subject to a transfer
tax for the purpose of allowing another member to intervene in such trans
action, or for the purpose of making a contract in his own interest at a
different price.
Seo. 10.3 No member of the exchange or a firm registered thereon shall sign
or give a proxy to vote on the stock of a corporation or association registered
in the name of such member or firm, except to the actual owner thereof upon
demand therefor, unless such stock is in the possession of such member or firm
or unless such member or firm or a customer thereof is the owner of or has
an interest in such stock at the time such proxy is given.

1 As amended May 7, 1931.
amended Jan. 9, 1929.
3Adopted July 7, 1927.

2As

See note 7 on p. — .

STOCK EX CH A N G E PRACTICES

In all cases in which a proxy shall be given by a member of the exchange
or a firm registered thereon to vote on stock registered in the name of such
member or firm, such proxy shall state the actual number of shares of stock
for which the proxy is given.
C h a p ter

XV.—Semiannual and other financial statements

S e c t i o n 1. Members who carry margin accounts for customers shall furnish
to the committee on business conduct, upon its request, which request shall be
made not less than twice in each year, a statement of his financial condition
or that of his firm in such form as shall be prescribed by said committee.
Seo. 2. Members of the exchange and firms registered thereon carrying mar
gin accounts for customers shall, as of the date of their answer to each ques
tionnaire, cause to be made a complete audit of their accounts and assets,
including securities held for safe-keeping, in accordance with such regulations
as shall be prescribed by the committee on business conduct, and shall file
with said committee a statement to the effect that such audit has been made
and whether it is in accord with the answers to the questionnaire. Such state
ment shall, in the case of each member of the exchange not a member of a
registered firm, be signed by such member of the exchange, and in the case of
each registered firm shall be signed by each member of such firm unless, for good
cause shown, the signature of one or more members is waived by the committee
on business conduct. Such statement shall in all cases be attested by the aud
itors, and the original report of the audit, signed by the auditors, shall be
retained as part of the books and records of the member or firm.
Seo. 3. Each member of the exchange and firm registered thereon not carry
ing margin accounts for customers shall, at least once a year and whenever
called upon so to do by the committee on business conduct, report to said
committee whether such member or firm holds securities for safe-keeping.
Each of such members or firms holding securities for safe-keeping shall, at least
once in each year, file with the committee on business conduct a statement
that all securities held for safe-keeping have been checked and found to be in
tact, which statement shall also show in what manner the verification of the
securities has been made and the date thereof.
Seo. 4.1 The committee on business conduct is authorized to require from
members of the exchange or their firms a statement, in such form as the com
mittee may prescribe, of the amount of money borrowed on time and on call
as of the last business day in each month, compilations based on such informa
tion to be made public as soon thereafter as practicable.
C h a p ter

XVI.—Offices and employees therein

Section 1. Members and member firms maintaining customers’ offices are
required to display therein certificates of membership provided by the exchange.
Such certificates shall be at all times the property of the exchange, and every
such certificate shall be returned to the exchange on the transfer of his mem
bership by the member of the exchange therein designated or on the dissolution
or insolvency of the firm or the permanent closing of the office in which it is dis
played or on the demand of the exchange.
Sec. 2. No office, other than the main office of a member, shall be established
without the prior approval of the committee on quotations and commissions
and the registration thereof with said committee. Applications for permis
sion to establish any such office must be in a form approved by said committee.
Sec. 3. The member establishing an office shall be responsible for the conduct
thereof.

Gaming, the serving of lunches, or the use in any wise of an office for other
than strict business purposes is forbidden.
Sec. 4. All branch offices shall be entirely separate from and must not
occupy joint quarters with an office occupied for the purpose of any other
business, with the exception that the committee on quotations and commis
sions may, in its discretion, approve the maintenance of bond salesmen’s head
quarters jointly with or as a part of such an office.
S e o . 5. All offices or bond salesmen’s headquarters shall be leased and con
ducted in the name and under the control of the member establishing them,
1 Adopted Jan. 19, 1926.

STOCK EX CH A N GE PRACTICES

and every employee therein must devote his entire time to the business o f
said office; that is, must not be in business for himself or be employed by~
any other person or firm, but shall act only as representative of his employer.
The person in charge of a branch office or bond salesmen’s headquarters
must not be paid a gross sum for the expenses thereof, such as rental, clerk
hire, or other expense, but all expenses thereof shall be borne directly by the
member.
Sec. 6. Bond salesmen’s headquarters shall not be used for the purpose of
soliciting commission business, but shall be merely central points for the con
venience of bond and security salesmen engaged exclusively in handling bonds
or unlisted securities in adjacent territory for the account of their employers.
No prices of stocks shall be posted at such headquarters.
Sew. 7.2 Members may allow to security salesmen a commission on sales o f
unlisted securities and on sales of listed bonds owned by said members.
Members may allow to security salesmen a commission on the sale of other
listed securities which are owned by said members when such securities have
been purchased directly from the issuing company by said members or their
firms either alone or acting jointly with other members or nonmembers.
Members, whether acting alone or jointly with other members or nonmembers,,
may allow to security salesmen a commission on the sale of other listed se
curities acquired by said members or their firms in any manner other than by
purchase directly from the issuing company and on the sale of listed bonds not
owned but upon which said members or their firms hold an option, provided
the members paying such commission shall have fully disclosed all the circum
stances in connection with such, transaction to the special committee on sec
ondary distribution and such committee shall have determined that it is not
against the interest of the exchange to offer such securities off the floor of the
exchange publicly by advertisement or otherwise and shall not have changed
such determination.
In all cases where commissions are allowed to security salesmen members
may allow similar commissions to such other employees in their offices as may
be approved by the committee on quotations and commissions.
S e c . 8 .3 The member establishing a branch office shall pay to the exchange
at the time said office is established a registration fee of $100, which fee shall
cover registration of said office up to the January 1 next ensuing, on which date
in each year a like registration fee shall be paid to the exchange; but said fee
shall not be required where such office is in charge of a resident partner or
where such office is not connected in any way by private wire or wireless.
Sec. 9. No member shall employ in any office, without the prior approval in
each case of the committee on quotations and commissions, any person for the
solicitation of business or any so-called customers’ man.
All such employees must have fixed and definite duties in such offices requiring
their attendance at least during the time that the exchange is open for business.
The employment of a clerk or clerks in a nominal position because of the busi
ness obtained by such clerk or clerks is forbidden.
Employment of traveling representatives for the solicitation of commission
business in listed securities will not be approved.
Chapter X VII.—Definitions

The following terms, as used in these rules, shall, unless the context other
wise indicates, be construed as follows:
Section 1. A stop order to buy stock becomes a market order when the stock
sells at or above the stop price.
A stop order to sell stock becomes a market order when the stock sells at or
below the stop price.
Sec. 2. The term “ business day,” when used in provisions relating to de
liveries shall not include Saturday half-holidays or days on which the ex
change, pursuant to previous resolution of the governing committee, is not open
for business, or days on which the governing committee directs that deliveries
are not to be made.
Sec. 3. The term “ ticket ” as used in these rules shall mean exchange tickets
as defined in the rules of the Stock Clearing Corporation.
2 As amended Mar. 11, 1931.
8 As airended Oct. 28, 1931, and Dec. 23, 1931.

STOCK EX CH A N GE PRACTICES

Seo. 4. The term “ delivery ” refers to delivery of securities on exchange con
tracts unless otherwise stated.
NOTES

1. Referring to paragraph (d), section 2, of Article XIX, the committee on
quotations and commissions has determined that in the case of bonds or notes
having five years or less to run to maturity, when selling below 90 or above 110,
the rates specified in section 2, paragraphs (a), (b), and. (c), of said article,
shall apply. The committee has further determined that on securities which,
pursuant to call or otherwise, are to be redeemed within 12 months the rates
specified in said article do not apply. On such securities the rates of commis
sion may be mutually agreed upon.
2. Referring to section 15, chapter 1, of the rules, the committee on quotations
and commissions has determined that specialists, floor brokers, and odd-lot
dealers shall be exempted from the provisions of this rule.
3. Referring to section 9, chapter 1, of the rules, the committee of arrange
ments has determined that bids or offers in securities of the United States,
Puerto Rico and the Philippine Islands, and of States, Territories, and munic
ipalities therein, shall be made at variations of not less than one thirty-second
of 1 per cent.
4. With reference to section 4 of chapter 1 of the rules, arrangements made
for employees of the Stock Clearing Corporation on the floor of the stock ex
change to provide facilities for the borrowing and lending of money were
approved by the governing committee.
5. Referring to section 10 of chapter 13. of the rules, the committee on quota
tions and commissions has ruled that commencing January 1, 1926, and until
further notice the monthly wire charge provided for under the above-mentioned
rule will be waived.
6. Referring to section 7 of chapter 14 of the rules, pursuant to resolution
of the governing committee, the special committee on secondary distribution,
consisting of 2 members from the committee on quotations and commissions,
2 members from the committee on stock list, and 1 member from the com
mittee on business conduct was appointed by the president.
7. Referring to subdivision 12 of section 1, article 10, of the constitution and
section 2 of chapter 14 of the rules, pursuant to a resolution of the governing
committee, in addition to the powers conferred by the constitution, the com
mittee on stock list is authorized to make such rules and regulations as it may
deem necessary in regard to the association of a member or firm with an
investment trust.

Exhibit No. 25, A p ril 21, 1932
(See p. 282 of this hearing)

Statistics in reffard to short selling, New York Stock Exchange—Short positions in individual issues April 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
Apr. 1

Abitibi Power & Paper Co. (Ltd)........... . ......................................
Abitibi Power & Paper Co. (Ltd.), preferred.-.............................. —
Adams Express Co........................ ........................... ........... ........
Adams-Millis Corporation.............................. ........ .......................
Advance-Rumely Corporation...... .......... .............................. ........
Affiliated Products (Inc.).----- ---------------------------------------------Air Reduction Co. (inc.)_______________________________ ____
Alaska Juneau Gold Mining Co--------------------------------------------Alleghany Corporation. . ---------- ------------------------------------------Alleghany Corporation,
per cent preferred $30 warrants___ ___
Alleghany Corporation, 5lA percent preferred $40warrants_______
Alleghany Corporation, 512 per cent preferred without warrants___
Allied Chemical & Dye Corporation----------------- ------- -------------Allied Chemical & Dye Corporation, preferred...... .........................
Allis-Chalmers Manufacturing Co.................................................
Amerada Corporation------------------------------ ------------ -------------American Bank Note Co-------- --------------------------- -------- --------American Bank Note Co., preferred__________________________
American Beet Sugar C o..--------------------------------------------------American Brake Shoe & Foundry Co., preferred_______ ___ ____
American Can Co-------- ------- --------- -------------- ------------- . ------American Can Co preferred....... ..................... ........ . ...................American Car & Foundry Co____ ________________ _________ .
American Car & Foundry Co., preferred______ ____ _________
American Chicle Co___________ ______ ________. . . __________
American Commercial Alcohol Corporation voting trust certificates..
American European Securities.................... ....... ...........................
American & Foreign Power Co. (Inc.)----------- -----------------------American & Foreign Power Co. (Inc.) preferred..........— ................
American & Foreign Power Co., second preferred(A) $7 cumulative..
American & Foreign Power Co. $6 preferred_________ ______ ___
American Hide & Leather Co-----------------------------------------------American Hide & Leather Co. preferred_______________________
American Home Products Corporation_______________________
American Ice Co___________________________ ______________
American International Corporation____________________ _____
American Locomotive Co___________________________________
American Locomotive Co. preferred__________________________
American Machine & Foundry Co__________________ ___ ____

Apr. 4

A pr. 5

Apr. 6

Apr. 7

A pr. 8

100

A pr. 9

Apr. 11

Apr. 12

25
25
14,020
125
43
200
6, 615
10, 571
8,182
205

25
25
14,070
125
43
15
6,675
18,116
4,532
205

25
25
14,020
125
43
300
5,795
19,464
4,942
205

25
25
14,120
125
43
400
5,570
18,894
4,930
105

125
25
14,120
125
43
800
6,091
18,938
4,930
105

25
13,710
125

100
25
14,210
125

25
14,410
4.40

14,210
125

700
4,796
17,625
5,125
5

700
4,551
19,165
4,825
5

800
3,926
19,401
4,750
5

800
4,639
18,057
2,750
5
90

100
69,697
40
949
185
75

100
68,080
40
974
185
85

100
63,420
40
874
185
85

100
64,815
40
674
195
85

100
64,771
40
349
185
85

64,472
40
504
185
115

64,382
40
1,304
185
115

63,607
40
504
385
90
9

54,223
40
704
360
90
9

100

77,517
50
125

75,906
50
125

10
920
1,100

10
910
1,100

3
102,283
106
125

3
103,615
125
3,645

200

30,429
75
270
271

120
105
1,525
970
425
450
400

2,690
300
20,964

10
6

10
6
84,694
105
25

78,944
105
25

80,997
50
25

1,770
1,000
19,279

1,600
1,000
18,437

255
120

255
95

1, 545
1,000
18,780
125
280

100
2,370
800
19,649

265
120

240

120
205
1,325
870
225
530

120

10
120

180
1,345
795
225
545

1,345
754
225
545

10
6

10
6
91,010
105

120

220

100

120
220
1,130
739
225
635

200

20
10
120

140
470
1,649

’ "’610'
200

10
6

76,957
50

10
6

19,579
225
260

18,187
290
260

60
700
843
17,242
260
260

120
116
250
1,589
100
600
200

120
90
250
1,589

120
290
250
389

600

465
125

20
10

200

20
10

1 1 9 8 5 2 — 3 3 — a p p .-

American P ow er & Light C o ___________________ _____________ - . . .
American R ad iator & Standard Sanitary Corporation-- . ________
American Rolling M ill Co ____ .
_
.
______________ . . . American Safety Razor Corporation. - . . _________ _____________
American Smelting & Refining C o . . . . . . . _______________ - American Smelting & Refining Co. 7 per cent preferred___ _________
American Smelting & Refining Co. 6 per cent preferred_____________

36
1,025
200
2, 522
1,987

35
925
200
2,312
1,290

35
925
200
2, 213
962

1,040
40
18
7, 385
125
50

1,440
40
18
7,505
155
50
200

390
40
8
7,425
155
50
200

290
20
8
7, 590
155
50
150

190
20
8
8,065
130
50
150

40
5
630
345
45
25
197, 695
1,000
30,276

500
1,591
1,193
5
450
20

11
1,481
1,493
5
410
20

500
11
631
735
5
730
20

500
11
565
453
5
430
20

5,965
140
35
50

6,134
140
35
50

6,160
65
235
50

20
230
110
50

70
380
300
50

70
280

20
324

185, 367

177, 659

175, 273

168,858

25,183
50
10
6,625
50

23, 397
50
10
6,935
50
274
4,040
100
43, 487
200
305
100

24, 240
50
10
6,300
150
25
258
3,060
100
35, 587
100
205
100

22,848
50
________
6,225
250
25
258
3,235
100
36, 617
100
205
150

...................

100
375
145
25
182, 019
1, 300
26, 750

150
385
45
25
201, 879
1,300
26,970

American T yp e Founders Co ______ ____________________
. ..
American W ater W orks & Electric Co. (Inc.)
. . . _______________
American W ater W orks & Electric Co. (Inc.) voting trust certificates.

10
2,505
25

10
3, 015
25

10
2,940
25

10
3,000
25

190
3
410
445
45
25
194,494
900
28, 713
50
10
-4,145
325

American W oolen C o ____ . . . __________________________________
___ ___________ _ _____
American W oolen C o., preferred..
_
American Zinc Lead & Smelting Co., preferred________________ •____
____________
Anaconda Copper M ining C o ______________
Anchor Cap C orp oration .. . . .
. . . . . . . ___ ____ __ . ______
Armour & Co. (Delaware) preferred.. _____________ ______________

44
882
100
41,105
200
190

44
2,687
100
38, 255
100
190

44
4,002
100
31, 374
100
175

230
4, 001
100
33, 255
100
185

257
3,883
100
31, 205
100
175

247
4,300
100
37,110
100
405

200
200

200
200
340

600
500
50

200
200
50

200
200

150

100

1,100

100

15,192
20
245
120
57
3
49, 770
10
220
625
10
2,797
250

11, 777
10
245
245
57

10,452
10
245
245
357

10, 777

49,895
10
220
725
10
2,592
250

48,493
10

46,691
10
100
725
10
2,485
350

American Stores Co

...

..........

American Sugar Refining Co. preferred____

- ............. .

American Telephone & Telegraph C o .. . .
American Tobacco Co. class B __

Armour & Co. (Illinois) preferred

_..........................
. . . ___ _

___ _______ . . . . . .
.

__ ______ _______

________

___________

75
14, 552

75
14, 960

Atlantic Coast Line R . R . C o __ _________ ____________________ _.
Atlantic Refining C o _________________ _____________ . ___________

301
770

301
670

Auburn Autom obile C o ____________ . ____________________________
Austin Nichols & Co. (Inc.) prior A _____ __ . _____________________

60, 255
10
25
1,326
22
5,926
485

52,105
10
1,005
1,401
7
4,696
455

Atchison Topeka & Santa Fe R y . C o ..

Baldwin Locom otive W orks . .

___________

_____ . . . __________________

Baltimore & Ohio R . R . C o ___ ____________________________________
Baltimore & Ohio R . R . Co. preferred___________________ _________

390
545
45
25
194, 637
1,000
28, 738

75
15, 530
50
301
670

75
21,079
50
301
680
57

75
19, 325

48,061
10
980
1, 095

48, 358
10
980
1,195

49,978
10

4,991
455

5,141
355

4,021
155

301
870
57

1,195

825
10
2,642
503

245
1,120
357

PRACTICES

6, 770
40
135
100
7

EXCHANGE

35
1,025
200
2,747
1,324

STOCK

35
925
200
3,041
1,312

Statistics in regard, to short selling, N ew Y ork Stock Exchange— Short positions in individual issues April 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
Apr. 1
5

___

A pr. 8

100

120

385
20
100
25
14, 657
1,955
68,598
990

325
20
100

325
70
100

170
5
5
325
70
100

14,104
2,455
61,953
1,045

13,047
3,105
66,181
1,245

14,135
2,920
66,309
1,415

15,046
2,295
63,407
1,030

________ ______________

730
25
18,455
300

805
25
19, 264
110

595

795
100
3,581

1,055

1, 055

590
50
19,393
167
100
565
100
3,065
25
955

590
50
17,986
381
100
1,165

2,971

590
25
19, 789
110
100
815
100
3,401
25
1,055

200
100

100

. _________________

Briggs & Stratton Corporation________________ ____________________ _
Brooklyn-M anhattan Transit Corporation, preferred A ......... ..............
_____________ ___________ __________
B rooklyn Union Gas C o_____
Brown Shoe Co. (In c.)__________________________ __________- ........ .......
Brunswick Terminal & Railway Securities C o........................................
Bucyrus-Erie C o ___________ ______________________________________ Bucyrus-Erie Co. preferred__________________ ______________________Bucyrus-Erie Co., $2.50 convertible preferred____ ___________________
B udd (Edward G.) Manufacturing C o______________________________
B udd W heel C o_______________ ___________________________________ _
Bullard C o __________________
__________________________ ________

40
700
200
1, 285
350

Bush Terminal Buildings Co. 7 per cent preferred___ ______________
Butterick C o . ___________________ __________________________________

Campbell W yant & Cannon Foundry C o................................................
Canadian Pacific R y . C or ........................................................................

1
1 826
500
83
100
300
9,373

40
100
200
1,385
350
1
601
1 555
300
50
100
350
11,996

40
100
200
1, 215
350
1
601
1,505
200
50
100
350
12,053

100
40
100
200
1,095
375
1
601
1,505
200
60
100
335
11,833

A pr. 9

A pr. 11

Apr. 12

5
30
5
5
245
25
100
300
7,823
1,375
65,654
1,000
200
340
25
17,993
100
100
425

5
20
5
5
325
25
100
300
4,328
1,050
56,069
650
200
340
25
16,458
100
100
545

50
5
120
5
5
325
105
100
300
4,008
975
55, 516
1,050
200
340
25
13,297
100
100
445

3,189
1,015
55, 631
1,250
200
240
25
12, 270
100
100
1,245

2,625
25
975

3, 545
25
840
15

2,890

2,135

2,384

640
15

580
15

915
15

100

400

300
2

200

40
700
100
200
955
325
1
601
1, 415
200
50
100
185
10,613

200
100
100
200
865
275
1
601
1,060
200
50

200

300
2
100
200

100
200
1,440
275
1
601
200
50

100
200
1,240
675
1
601
985
200
108

100
200
1,415
875
1
1
1,020
400
108

310
8,413

210
8,678

60
9,409

50
9,034

200
5
2,145
140
125

PRACTICES

- _______________________

Boston & M aine R . R . C o_____________________

Apr. 7

EXCHANGE

Bon A m i (The)

A pr. 6

STOCK

Blaw -K nox Co

A pr. 5

Apr. 4

Case (J. I.)
Case (J. I.)
Caterpillar
Central R .

----------- - - - ------------- -----------------------------------C o .Co. preferred_____ ____ _______ ____ . ___ _____ . . .
Tractor C o ______________ _ .... ________ ______ _______
R . of N ew J e rs e y ------------------- -------------------------------------

Cerro de Pasco Copper Corporation______ _________________________

Chicago, R ock Island & Pacific R y. C o ------------------- ---------------- -------

1,775
25
2, 155
4,181
8,279
175
377
4,950
30
1,350
240
3,233

205

205
81, 126
5
422
35

205
79, 279
5
500
35

205
76, 579
5
540
35

600

575

1, 600

2,155
2,846
9,412
175
107
4,950
1, 730
1,300
215
3,108

5
1,981
8,117
175
7
5,130
1,630
1,250
215
3,108

105
1,891
8,152
175
207
5,180
1,330

50
20, 665
256

1,100

215
3,108

15
35

1, 560

975

750

575

105
1,991
7,692
275
157
3,330
130
1,225
215
3,083
17
50
20, 550
256

5
1,615
2,970

5
2, 355
3,850

110

2,045
4,105

5
2, 293
4,067

200

57
430
30
675

57
430
30
975

57
380
30
975

7
380
30
975

C ity Stores C o -------------------------- -----------------------------------------------------Coca-Cola Co. (T h e )________________________________________________
Coca-Cola Co. (The), class A __________________________ ___________
Colgate-Palmolive-Peet C o ----------------------------------------------------------------

70
18, 375

470
23,185

470
23,257

470
24, 612

470
24, 544

210

110

460

360

280

230

Colorado Fuel & Iron C o. . . -- ___ __________________ ___________
Columbia Gas & Electric Corporation______________________ ______

45
3,638
155
57

45
3,703
205
57

45
3, 268
205
57

45
3,952
80
57

Commercial Solvents C orporation_________________________ _______
Commonwealth & Southern Corporation . . _______________________
Commonwealth & Southern Corporation preferred------------- -------------

110
120

100

3,908

110

16. 216
256

14, 511
256

12,035
231

10, 870
231

420
23, 245

420
23, 831
310
293

420
23, 839

420
25, 301

100

110
200
100

75
3,695
325
76

75
4,959
325
57

25
4, 510
225
57

110

243
100

110

210

100

110

210

3,210

3,190
150
40
5
5
1,435

3,480
150
50
5
5
935

3, 760

3,620

2,935

3,685

3,195

3, 835

200

100

40
5
5
985
30

40
5
5
885

115
5
250

250

125

1,097
364
225
25

972
5,750
475
25

310
6,394
330

940
5,395
455

340
5,145
305

640
5, 756
180

854
1,044
375
25
30

500
232
31,473
115
150

335
232
29,547

335
232
25, 025

232
22, 502

100

40
15
1,310
1
1, 611

1
1,211

276
125
25

5,539
230
225
50

Consolidated Film Industries (In c.)____________
______ __________
Consolidated Film Industries (Inc.), preferred_______ ______________
Consolidated Gas Co _ . . . _____ ______________ _ ___ __________

300

400

300
300
41,995
505
150

300
272
42,126
515
150

300

100

3, 833

3,060

1 0

-------- ------------------

100
110

120

3,958

3,172

Consolidated Cigar Corporation 6M per cent preferred______ ______
Consolidated Cigar Corporation, 6^2 per cent preferred without war-

Consolidated Laundries Corporation

110
120

200

51, 687
315

48,957
405
350

200

36, 361
430
150

90
10

100

150

PRACTICES

50
23,070
256

Commercial Investment Trust Corporation____________________ . . .

51, 789

135
35

50
12, 235
296

52, 795

100

50
11, 955
296

Commercial Credit Co. 6 per cent preferred_________ ____ _______

54,218
135
35

........
...... ............................
Childs Co
- ........
Chrysler Corporation______________________________________ ____ . . .
C ity Ice & Fuel C o__________________
____________________________

Columbia Gas & Electric Corporation 5 per cent preferred____ _____
Col. Pictures Corporation voting trust certificates for common stock.
Columbian Carbon Co. voting trust certificates_________ _______ Commercial Credit C o ------------------ ------- ------------------------ ----------------

55, 409

EXCHANGE

5
422
35

86, 709

STOCK

Checker Cab Manufacturing Corporation__________________________
Chesapeake Corporation_______________________________ __________
Chesapeake & Ohio R y. Co ________________________________________
Chicago Great Western R . R . C o ... _______________________________
Chicago Great Western R . R . Co. preferred_______ ___ ____________
Chicago, Milwaukee, St. Paul & Pacific R . R . C o____ _____________
Chi., Milwaukee, St. Paul & Pacific R . R . Co. preferred___________
Chicago & Northwestern R y. C o ____________________________ ______

205
101, 609
5
722
35

Statistics in regard to short selling, N ew Y ork Stock Exchange— Short positions in individual issues A pril 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
Apr. 1

35, 768
163
100
50
60
85
7,277
1,150
2,402
49
2
6,930
8

35,688
163
100
50
60
195
8,527
1,140
2,112
49
2
6,496
6

35,098
163
100
50
60
275
8,722
1,340
2,302
49
2
5,491
6

530
575

2,245
575

2,480
575
75

A pr. 7
35,198
163
100
50
60
275
9,637
1,240
2,627
49
2
5,375
6
20
2,375
575
275

A pr. 8

A pr. 9

20
421
25
150
5,876
255
460
360
215
1,440
300
530

20
421
25
50
5,866
155
460
350
215
1,315
275
530

421
25
50
3,941
155
460
350
215
1,425
275
630

385
25
106
133
150
10
13,378

285
25
106
133
150
10
18,443

285
25

195
25
33
150
10
17,800

125,066

130,344

133
150
10
16,270
50
118,695

113, 812

33,176
50
100

32,307
50
100

30, 519
50
100

29,808
50
100

Apr. 12

16, 723
63

26, 211
60

28,148
63

23,438
13

10
561
10,562
376
3,185
20

20
10
551
10, 737
176
3,375
49

10
210
915
9,726
926
3,275
49

110
10
1,160
8,691
690
3,413
49

5,160
5

3, 715
5
20
2,230

2,490
5
20
2,13

823
22

828

4,500
5
20
2,010
70
1,028

1,860
828
22

421
25
50
7,106
155
460
260
415
1,105
400
400

A pr. 11

200

. 200

421
25

411
25

351
25

226
25

1,341
25

3,941
155
460
350
315
1,440
250
645

4,289
230

465
280
500

4,989
330
25
100
515
525
272
650
100
245
30

4,189
380
25
100
515
725
272
594

195
25
1,100
33
150
10
15,038

4,175
255
25
100
315
535
187
640
100
665
280
500

10
13, 058

10
14,115

10
13,190

10
10,995

87,907
100
24,830
50

85,789
150
21,959
50

78,254
300
20,415
50

80,428
425
19,165
50

98,299
100
27,435
50
100

100
315
910
572
465

100

145
130

PRACTICES

Eaton Manufacturing C o______ _____----____________ ________________

A pr. 6

EXCHANGE

380
575
148
3

Apr 5

STOCK

100
60
60
95
6,427
550
2.352
'749
2
4,570
8

Apr. 4

Eitingon Schild Co. (In c.)_________ _____________ _________ _______
Eitingon Schild Co. (In c.), preferred____ _____________________ __ _
Electrical & M usical Industries (L td .), American shares____________
Electric (The) A uto-Lite C o ____ __________________________________
Electric (The) A uto-Lite Co. preferred_______ ___________ _______
Electric Boat Co ____________________________________________ ____
Electric Power & Light C orporation._____ ____ ______ _____________
Electric Power & Light Corporation, $7 preferred..................................
Electric Power & Light Corporation, $6 preferred___________________
Electric Storage Battery Co ______ _____________________ ____ _____

Firestone Tire & R ubber Co. preferred without warrants___________
First National Stores (In c.)_______________________________________
Fisk Rubber C o __________________________________________ _________

100
2
100
234
50
60
2
25
61
2,944
110
300
250

American T ank Car Corporation___________________________
Asphalt C o ________________________________ ________________
Baking C o_________ ________________________________ ______
Bronze Corporation____ ____________________________________

General Cable Corporation, class A . . . _. __________________________
General
General
General
General
General
General

Cigar Co. (I n c .)____________________ . ------------------------------Electric C o ____________________________ _________- __________
Electric Co., special-------------------- ------- --------------------------------Foods Corporation___ __________________________________ _
Gas & Electric Corporation, class A . . . .................................. .
Gas & Electric Corporation, $8 p referred..................................

200
50
595
622
10
350
16, 280
285
125
879
36
200

2
100
234
50
60
2
25
61
4,369
110

2
100
309
140
60
2
25
61
4, 779
110

2
100
309
440
40
2
25
36
5,199
110

2
100
309
165
15
2
25
36
5,324
110

100
1,170
1,865
200
55

250

350

500
660
1,116
100

500
530
969
100
1

590
630
1,108

590
330
894

590
330
1,021

50
1,056
300
1,025
10

50
1,316
300
725
10

50
1,311
300
845
10

50
1, 421
400
845
10

50
1,351
500
1,045
10

165
1
5
119, 425
52
11, 985
98
5

165
1
5
106,112
52
14,110
98
5

165
7
45
95,052
52
13, 770
98
5

165
7
75
91,806
52
13, 580
98
5

165
7
85
72, 898
52
15, 989
105

Gamewell Co. (T h e )___ _ _ . . . ................... ................................ .......General American Investors Co. (Inc.), 6 per cent preferred without
General
General
General
General

200
50
595
982
10
350
16,920
375
125
979
36
100
20
100
1,370
1,865
300
55

50
3,347
10

150
2, 597
10

150
6,117

2,282

14,122
85
75
400

13,683
60
75
10

11,998
50
75
110

11, 272
50
75
210

100
2,730
1,190

100
2,930
1,290

100
2,930
1,190

100
3,030
1,500

55
100

210
190
15
2

210
240
15
2

300
100
340
15
2

100
490
15

36
5, 754
410

36
7,959
410

36
7,419
10

46
7,209
10

490
165
286

690
165
511

100
690
165
581

690
145
555

1,151
400
620
10
300
165
2
95
67, 503
62
16,029
196

1,261
300
780
10
300
165

1,151
300
570
10
300
165

1,036
300
570
10
300
165

95
55,348
62
17, 461
296

95
52,272
62
17, 914
196

95
47, 836
552
18,884
96

PRACTICES

Fourth National Investm ent Corporation, without warrants. _____
Fox Film Corporation class A ________________ ____ _______________
Freeport Texas C o__________________________________________________

25
1,034
76
120
20
100
1,070
2,190
310
55

200
50
605
2,587
10
350
17, 085
125
125
704
36
100
20
100
1,270
1,865
310
55

EXCHANGE

Federal W ater Service Corporation class A . . . ............... ............ .......... .
Fidelity-Phenix Fire Insurance Co. of New Y o r k ...____ ____________
Fifth Avenue Bus Securities Corporation___________________________

350
25, 358

300
50
405
3, 177
10
350
20, 908
75
275
748
56
120
20
100
1,170
1,965
310
55

STOCK

Engineers Public Service Co. $6 preferred___________________________
Equitable Office Building Corporation ___________________________
Erie R . R. C o...... ..................... ................ ................................ ............. .......
Eureka Vacuum Cleaner <"!<>____ _________________________________
Exchange Buffet Corporation______________________________ _________
Fair (T h e )_________________________ ________________________________
Fairbanks Morse & Co. (I n c .).. ___________________ ____ __________
Federal Light & Traction Co. p re fe rre d ............................................. . .

200
50
345
2,970

Statistics in regard to short selling, N ew Y ork Stock Exchange— Short positions in individual issues A pril 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
Apr. 1

____________________________

. __ _ ________________

Granite C ity Steel C o_________________ . . . . . .
_____ ________
Grant (W . T .) Co ______________________________
________________
Great Northern Iron Ore Properties certificates of beneficial interest.
Great Northern R y . C o., preferred _______ . . .
________________
Great Western Sugar C o., preferred .. . . - __ ____________________
Grigsby-Grunow C o _____________ _____________ _ ________________
H ahn Department Stores (In c.)____ __

. . ____ __________ ________

Hercules Powder C o., preferred__ .. - . . . ____ __ _______________
Hershey Chocolate Corporation. _____________ . _________________

Homestake M ining C o______________________*______________________

A pr. 7
50
415
241,454
160
10

A pr. 8

365
263, 905
200

365
270,135
440
10

365
267, 699
190
10

365
262, 408
200
10

18
45
600
220
21,157
180
490
40
10
1,294
638
13, 257
151
1,085

218
75
600
220
30, 731
180
490
40
10
2,450
645
8.972

18
25
600
220
31, 692
200
490
40
10
2, 612
630
fi, 770
126
1,085

118
25
600
220
31, 075
130
490
40
10
1,437
615
6,570
126
76
1, 385

118
50
600
220
30,390
130
490
40
10
920
640
5,765

1,650
110
750
154
50
50
1,315
100
317
25
112
282
28
500
25

1,650
110
650
154
100
50
1,040
100
327
25
142
429
28
500

1, 950
110
650
154

2,050
110
660
154

50
1,080
100
477

50
805
150
467

10
778
178
4,720
100
965
3
2,000
60
300
70
2
50
620
150
840

140
318
28
520

140
218
28
500

iio
168
28
500

200
25

1,085

3
3,500

3
3,285

3, 350

1
3, 575

40
156

600
40
156

Apr. 11

460
177,020
400

25
100
20
29,108
100
400
25
10
233
178
4,025
126
50
890
3
2,000
60
300
70

25
109
20
26,183
100
400

25
109
20
24,813
100
400
25
20
690
128
3,636
50
890

500
20

90
440
28
500

50
905
50
790
60
86
440
28
500

50
845
50
790
50
56
563
28
500

50
895
50
790
78
151
340
28
500

100
25

142
25

100
25

1
2,635
100
200
40
156

10
2,340
100
100

10
2,910

10
2,445

100

131

1
100
50
109
20
29,270
100
450

615
231,674
350

Apr. 12

365
202,435
200

1,385

515
238,470
225

A pr. 9

10
605
128
4,081
55
790
3
2,000

2,400

25
6
1
2,560

131

PRACTICES

Grand Union (The) Co. trust certificates.-

A pr. 6

EXCHANGE

____

A pr. 5

STOCK

Glidden Co. (T h e )__________

A pr. 4

80
150
1,900

80
125
1,900

80
230
1,770

70
10
975

70
10
900

79
310
1,090
830
1,760
40
590
1,242
200
1,385

70
10
765
60

69
220
590
330
1,328
40
630
1,232
200
1,285

69
270
194
350
1,765
40
730
1,232
200
1, 210

59
240
345
155
1,160

200
245
155
1,215

250
145
132
1,027

70
10
815
60
14
270
445
132
587

530
535

515
450

615
550

615
450

1,225

300
10,297
600
115

300
10,162
200
170

300
10,666
200
170

200
10, 506
450
115

1,225
100
100
11, 751
300
125

1,225

300
10,981
320
115

100
11, 531
100
5

200
10,974
100
25

200
12, 344
100
25

325
11,865
410
2,989
4,105
670
4,895
480

300
14,290
410
2,389
3,840
670
5,545
480

300
12, 825
485
2,589
3,740
70
8,120
480

300
11,815
480
2,489
3,340
70
6,999
480

300
10,185
480
2,515
2,005
70
4, 719
480

300
10,285
415
2,130
4,210
70
5,762
465

300
8, 615
345
2,205
2,960
70
5,687
465

300
8,065
445
2,305
2,860
70
5,227
465

50
10
1, 750
100
4
59,700
145
475
9,366
2

50
10
1, 770
100
4
55,387
145
525
8,911
2

50
10
13, 780
100
4
55,098
95
125
8,000
2

50
10
15,105
100
4
84,297
20
275
7,145
2

50
10
12,615
100
4
77,771
20
25
7,215
2

400
6,975
435
1,810
2,500
70
5,562
465
20
50
10
11,740
100
____
74,518
120
25
7,340
2

20
10
100
260
300
5
24

10
10

250
200

250
300

International Paper & Power Co., class C __________ ____ __________

International Shoe C o _______ _____________________________________ .
International Silver C o ___ _________________________________________
International Silver Co., preferred________________________ _______ _
International Telephone & Telegraph C orporation.............................
Interstate Departm ent Stores (I n c .)____________________ ____ ____ _
Jewel Tea Co. (I n c .)_____________________________ ____ _____________
Johns-Manville Corporation_________ _______________ ______________
Johns-Manville Corporation, preferred________ _____________________

1,320
150
10
57,800
145
725
9,376
20

1,320
150
4
53,689
145
525
9,716

100
15
100

29
100
10
100

1, 520
150
4
47,005
145
475
8,931
2
2

320
5

435
5
24

400
5
24

10
100
260
400
5
24

200
1,280

1,880

1,130
8
753

950

1,050

690

1,330
8
1,072

750

1,340
8
3,120

1,230
8
910

650

1,650

1,400

600

3,620

2,870

3,670

2,990

5,530

5,785

5,255

4,520

Kansas C ity Southern Railway C o., preferred ____________________
Kaufmann Departm ent Stores (I n c .)...... ..............
............ .
Kelly-Springfield Tire C o ______________________________________ ___
Kelly-Springfield Tire Co., 6 per cent preferred............... ......... .
Kelly-Springfield Tire Co., 8 per cent preferred________ _____________
Kelsey-Hayes W heel Corporation.......... ............. . . ___________
Kelvinator Corporation......................... .......................................................
Kendall Co. (T he), participating preferred A ________ __________
Kennecott Copper Corporation............................... .............. .....................
Kresge (S. S.) C o............. ................. .............................................................

10
100

240
300

PEACTICES

105
150
2,100
100
258
310
1,190
1,030
1,505
40
715
1,477
200
1,135

EXCHANGE

134
150
2,105
25
238
510
490
1,330
2,180
40
765
1,302
200
1,460

STOCK

Houdaille-Hershey Corporation, class B ____________________________
Household Finance Corporation, part preferred_____________________
H ouston Oil Co. of Texas, certificates of beneficial interest___________
H ouston Oil Co. of Texas (new), voting trust certificates__________
H owe Sound Co., voting trust certificates_________ _____________ . .
H udson & M anhattan R . R . C o_____ ______ ______________________
H udson M otor Car C o ___ _________________________________________
H upp M otor Car C o ______ _________________________________________
Illinois Central R . R . C o ______________________ ___________________
Illinois Central Leased Lines sinking fund, 4 per c e n t ______________
Industrial R ayon Corporation_______________ ____ _________________
Ingersoll-Rand C o __________________________________________________
Inspiration Consolidated Copper C o______ . ______________ _______
Interboro R apid Transit Co. voting trust certificates__________ ____
Intercontinental R ubber C o_____ _______________
________
Interlake Iron Corporation. _______________ ______________________
International Business Machines Corporation______________________
International Cement Corporation________________ ________________
International C om bustion Engineering C o rp o ra tio n ______ ________
International Com bustion Engineering Corporation, convertible
preferred__________________________ _____ ________________________
International Harvester C o . . . _________ _____________ ______ _
...
International Harvester Co., preferred______________ ____ ________
International H ydro-Electric System, class A _ _ ____ _______________
International M atch Corporation participating, preferred___________
International Mercantile M arine C o________________ _______________
International N ickel of Canada (L t d .)___________________ _________
International Nickel of Canada (L td .), preferred_____ ______ _______

Statistics in regard to short selling, New York Stock Exchange— Short positions in individual issues April 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
A pr. 1

A pr. 4

A pr. 5

A pr. 6

A pr. 7

181,420
2,143
3,180

35
118,771
1,943
3,495

35
87,889
2,543
2,645

85
77,489
2,543
2,355

85
13,874
2,553
1,950

118

200
30

300
20

200
40

45
1,320
70
300

45
1,555
70
300

30
1,725
70
200

30
1,925
70
200

30
2,005
70
200

8,241

8,666

8,411

8,561

4,460
50
1,740

25
3,937
50
840

Apr. 8

85
10,191
2,748
1,635
50
100

A pr. 9
42
85
8,250
2,298
1,680
50

Apr. 11
42
55
5,825
2, 513
2,390
50

M cK eesport T in Plate C o..............................................................................

1,850
20

1,865

1,465
20

8,061

20
6,988

20
7,911

20
9,088

120
6,217
50
1,340
100
965

25
5,962
50
1,040
200
915

25
5,132
50
415
50
1,555

400
6,037
50
465
650
2,130

225
4,262
50
465
550
1,630

207
785

207
585

115
460

115
335

IIs
145

25
1,703
3,021
700
51
1,460
400

25
938
3,424
700
51
1,475

25
908
3,685
500
1
1,675

25
708
3,794
400

445

307
605

1,995
5
207
690

50
4,802
50
940
100
1,550
5
257
785

25
1,943
3,268

25
2,118
2,908

25
2,338
2,611

25
2,313
3,166

1
535
400
865

1
710
400
775

51
760
400
765

90
149
135

90
49
235

90
36
135

200

242
100
50

207
100
50

237
100
50

207
100
50

197
100
50

200
3,733

150
2,943

100
2,758

100
2,697

100
3,403

2,855

285
400
865
100
90
49
235

32
65
4,925
1,688
2,500
50
10

Lehigh Valley Coal Corporation____ _________________ _______ _______

1,989

Apr. 12

1,575
400
845

1,390
45
5
194
8, 518
20
125
3,882
50
915
765
2,091
215
450
20
25
1,053
3,688
400
150
1,385
400
645

3
200
2
197
100
50
9

3
200

297
100
50
9

397
100
50

2,760

2,350

2,690

Oi
0°

100

800
25

'ioo

100

150

150
20

150

220

20
50
15
850

50
15
50

115

800
25

"Ioo
20

110

115

100

6,630
2,825

6,855
2,630

4, 592
505
350
50

4,370
505
200
50

100

6,705
2,730

100

4,074
505
185
50
50
5

20
50
15
950

90
135
7,105
2,940

90
135
7,205
3,040

100

3,774
405
185
50
50
5

100

4,059
405
35
50

20
5

500

* '"i
25
100
20
90

200

90
100

200

20
90

100

20
90

100
100

800
50

65
6,965
2,635
200

105
6,765
2,485

105
6,760
2,540
200

105
6,760
2,550

3,465
75

3,935
100

3,010

2,415

200

100
35

100

200

100
40
66
85

100

100
440
7,200

450
6,260

795
5,535

7,477
1,530
5,853

7,473
1,460
6,178

655
6,605

130
9,675

430
7,060

230
6,135

5,745

30
9,252
1,440
11, 531
57
233
9

10,134
1,955
11,865
57
225

9,010
2,085
11,238
57

10,361
2, 065
11,408
57

10,090
1, 765
10,319
57

6,729
1,360
7,677

7,329
1,430
7,467
250

250

568

1,220

1,240

1,255
16

2,210

1
8, 665
30
50
5,945
135

8,065
30
50
5, 515
135

7, 525
30
50
4,275
125

1,960
172
15
7,475
30
50
4,405
75

2,035
142

300
48, 966

300
55, 263

1
7,215
30
50
5,670
235
5
400
52,882

1,030
15

7,845
30
50
3,585
235

1, 335
10
1
6,125
30
50
4,055
235

500
52, 327

500
46,194

100

910
46,675
118

7,321
30
190

5,874
40
190

5,579
40
190

5,264
67
290

5,304
67
290

4,155
50
150

1,210

100

110

100

400
40,187
18
100
4,895
40
150

5,400
30
50
4,005
75
450
36, 697
118

100

3,670
40
150

2
100

PBACTICES

100
440
6,035

EXCHANGE

100

STOCK

M cKesson & R obbins (Inc.)____ __________________________________
M cKesson & R obbins (Inc.), preferred A __________________________
M cLellan Stores Co., preferred A __________________________________
Melville Shoe Corporation_________________________________________
Mesta Machine C o________________________________________________
M etro-G oldw yn Pictures Corporation, preferred___________________
M iam i Copper C o_________________________________________________
M id-Continent Petroleum Corporation____________________________
Midland Steel Products C o___________________________ ____________
M idland Steel Products Co., first preferred________________________
Minneapolis-Honeywell Regulator C o _____________________ _______
M inn.-M oline Power Im plem ent C o______________________________
Minneapolis, St. Paul & Sault Ste. Marie R y ., 4 per cent certificates.
Missouri-Kansas-Texas R . R . C o __________________________________
Missouri-Kansas-Texas R . R . Co., preferred__________________ ____
Missouri Pacific R . R . C o _________________________________________
Missouri Pacific R . R . Co., preferred______________________________
M ohaw k Carpet M ills (In c.)______________________________________
Monsanto Chemical W orks________________________________________
M ontgom ery W ard & Co. (In c.)___________________________________
Morrell (John) & Co. (In c.)___ __________________ ______________ _
M otor Products Corporation_________________________ ____________
M otor W heel Corporation_________________________________________
Mullins Manufacturing Corporation_______________________________
M ullins Manufacturing Corporation, preferred___ ____ ___________
Munsingwear (In c.)__________________________________ ____ _______
Murray Corporation of America (T h e )____________________________
Nash M otors Co. (T h e)______________________________________ ____
Nashville, Chattanooga & St. Louis R y . C o _______________________
National A cm e C o _________________________________________________
National A ir Transport (In c.)_____________________________________
National Biscuit C o _______________________________________________
National Cash Register Co. (T he), class A _________________________
National D airy Products Corporation_____________________________
National Department Stores (In c.)________________________________
National Distillers Products Corporation__________________________
National Distillers Products Corporation, preferred________________
National Lead C o __________________________________________________
National Lead C o., 7 per cent class A ______________________________
National Lead Co., 6 per cent preferred class B ____________________
National Power & Light C o _________________________________ ____ _
National Railways of Mexico, first preferred_______________________
National Railways of M exico, second preferred____________________
National Steel Corporation______ ________________________________ _
National Surety C o________________________________________________
National Tea C o __________________________________________________
Nevada Consolidated Copper C o__________________________________
N ew Y ork Central R . R . C o ______________________________________
N ew York, Chicago & St. Louis R . R . C o . . . ____ __________________
N ew Y ork Investors (In c.)____ ____________________________________
N ew York, N ew Haven & Hartford R . R . (T h e)__________________
N ew York, N ew Haven, & Hartford R . R . (The), preferred_______
N ew York, Ontario & Western R y . C o............... ............................ .......

15
5,375
30
50
4,140
175
350
33,967

100

300
3,885
40
150

OS
CO

Statistics in regard to short selling, N ew Y ork Stock Exchange— Short positions in individual issues A pril 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
Apr. 1

Pierce-Arrow M otor Car C o., preferred......................................................

A pr. 8

A pr. 9

A pr. 11

A pr. 12

45
25
620
2,532
2,040
85,272
600
10
928
300

45
20
1, n o
2,121
2,040
90,443
500

100
64

100
54

100
4

105
4

360
1,589
320
81,234
400

410
1,644
320
80,884
400

310
1,764
320
76,021
400

215
1,760
320
75,959
400

943
100

660
200

810

619”

569

395

33
340
2

710
800

33
295
2

20
100
5,001
660
174
20
5,916

20
100
4,089
550
174
2
875

20
30
4,072
525
106

20
30
3,517
245
100

20
30
4,042
370
100

4
19, 781
75

4
9,465
100
100

4,005
100
4
7, 795
100
100

4,205
100
4
7,590
100
100

1,130

4
21,931
75

4
7,246
100
100

1,200
100
28
2,900
8
13,387
372
1,848
20
10
247
500
25
200
307
115
210

1,200
100
5
2,430
8
10,840
372
2, 085
20
10
247
500
25
200
943
115
210

2,585
8
9,104
372
1,975
10

2,635
8
8,099
372
1, 770

200
2,185
8
8,175
372
1,745

335
2,850
8
7,974
372
1,730

247
100
25
200
756
115
210

200
185
500
25
200
856
15
210

200
185
200
25
200
520
15
210

40
20
845
1,837
2,240
79,953
200

40
20
755
2,257
2,140
88,057
200

10
40
20
720
2,205
2,240
81,764
100

823
379

1,053
729

833
329

784

939

684

100
4,695
905
346
20
5,005

100
6,042
755
290
20
5,091

25
10
100
6,202
565
454
20
5,196

25
20
100
6,572
485
744
20
6,686

4
24,472
75

4
22,138
75

4
22,438
75

1,200
100
38
2,315
20
10,944
372
2,063
1
300
172
500
30
200
581

1,200
100
38
2,840
20
12,709
372
2,088
1

230

1,200
100
28
2,640
8
11,955
372
1,748
1
10
147
500
25
200
383
115
228

172
500
30
200
466

A pr. 7

340
2

247
100
520
15
210

PEACTICES

Philadelphia and Reading Coal & Iron Corporation________ _______

A p r. 6

EXCHANGE

Peoples Gas L igh t'& Coke Co. o f Chicago____________ _______ ______

A pr. 5

STOCK

Patino M ining & Engineering Consolidated (Inc.) American shares..

A pr. 4

M
°

1,000
125
100
156
70
2
10
150
745
2,846

1,000
525
100
156
180
2

10
1,000
225
100
156
70
2

150
945
3,651

150
495
2,976

1,000
100

1,000
100
100

1,000
200
100

70
2

300
300
6,026
70
11,699

300
300
5,186
70
9,974

300
300
6,351
70
8,389

300
300
5,871
8,456

50
3,495
402
19
600
21, 918
155
316
5,560
25
2,075
100
260

50
3,075
402

50
3,125
502

600
19,975
155
316
5,560

450
20,235
155
210
5,450

2,075
100
310

2,075
100
335

168
250
369
20
11, 273
500
500
10, 920
10,101
66
16

158
250
369
21
10, 968
900
500
9, 770
9,640
58
16

236
200
259
23
9, 348
700
500
9,870
10,129
13
6

1,450

1,250

1,350

70
100
1,125
7,071

70
100
1,025
8, 371

70
100
900
7,636

200

100

35
810
50

35
810
25

35
810
50

13, 771
2
3

14,629
2
3

14,524
2
3

15,009
2
2

15,090
2
2

3, 935
402
20
2, 815
20, 879
250
1,086
6,129
110
2,425
100
25
305
1,064
200
300
45
7,188
700
500
21,145
6,437
91
16
100
1, 527
300
70
245
915
16,103

3,430
302
10
2,350
18, 224
150
1,086
6,074
110
2,350
100
55
305
669
200
300
49
7,163
600
600
19,915
7, 352
2
31
100
1,625

3,565
302
10
2,350
18,064
150
891
6,049
125
2,275
100
235
305
569
200
200
52
9, 620
600
500
19,160
7,667
20
31
100
1,625

3,595
302
1
2,350
16,284
150
991
6, 059
110
2,275
100
235
305
569
200
200
42
10,190
600
500
17, 600
8,042
20
31
100
1,525

3,470
302
2, 250
16, 277
155
891
6,097
100
2,255
100
225
305
569
200
119
20
9,165
1,000
500
17, 100
7,930
20

70
245
940
15, 406

70
245
740
15,170

70
245
1,240
13,865

70
245
1, 340
10,686

1,020
100
980
286
10

970
100
1,295
366
50

620

80
100
1,025
7,456
2, 250
100

895
266
50

295
111
50

145
611
50

65
1,110
50

100
1, 525

3,375
302
19
600
22,485
155
316
5,493
2,175
100
310
50
236
200
244
20
8,853
900
500
11,830
9,056
20

PRACTICES

1,000
20
100

EXCHANGE

_____ 1____________
1,000
1,000
25
25
100
100
156
156
70
70
2
10
10
150
150
945
945
3,821
3,471

STOCK

Pierce Oil Corporation________________ ________________________
Pierce Petroleum Corporation______________________ _____ ____
Pillsbury Flour M ills (I n c.)_________________ ____ ____________
Pirelli Co. of Italy, American shares___________________________
Pittsburgh Coal Co. (of Pennsylvania)______________ _______ ..
Pittsburgh Coal Co. (of Pennsylvania), preferred______________
Pittsburgh Steel C o., preferred__________ _____________________
Poor & Co. class B ____________________________________________
Prairie Oil & Gas Co. (T h e )______________________________ ____
Prairie Pipe Line Co. (T h e )_________ _________________________
Procter & Gamble C o _________________________________________
Procter & Gamble C o., preferred________________ ____ ________
Public Service Corporation of N ew Jersey_____________________
Public Service Corporation of N ew Jersey, 7 per cent preferred.
P ublic Service Corporation of N ew Jersey, 6 per cent preferred.
Public Service Corporation of N ew Jersey, $5 preferred________
Pullman (In c.)________________________________________________
Pure Oil C o. (T h e )_______________ _____________________________
Pure Oil Co. (T he), preferred_________________________________
P urity Bakeries Corporation__________________________________
Radio Corporation of America_________________________________
R adio Corporation of America, 7 per cent preferred A _________
Radio Corporation of America, $5 preferred B _________________
Radio-Keith-Orpheum Corporation, n e w .____ ________________
Raybestos-M anhattan (I n c.)__________________________________
Reading C o ____________________________________________________
Real Silk Hosiery Mills (I n c .)_____ ___________________________
Rem ington-Rand (I n c.)_______________________________________
Reo M otor Car C o ____________________________________________
Republic Steel Corporation____________________________________
Republic Steel Corporation preferred__________________________
Reynolds Metals C o___________________________________________
Reynolds (R . J.) T obacco C o__________________________________
Reynolds (R . J.) Tobacco Co. class B . ____ ___________________
Richfield Oil C o. of California_________________________________
Rossia Insurance Co. of America______________________________
Royal Dutch Co. certificates of ordinary stock, N. Y . shares___
Safeway Stores (In c.)____________________________ _____________
Safeway Stores (Inc.), 7 per cent preferred_____________________
Safeway Stores Co (In c.), 6 per cent preferred_________________
St. Joseph Lead C o____________________________________________
St. Louis-San Francisco R y. C o _______________________________
Savage Arms Corporation_____________________________________
Schuite Retail Stores Corporation_____________________________
Seaboard A ir Line Railway C o __________________ _____________
Seaboard Oil Co. of Delaware_________________________________
Sears, Roebuck & C o __________________________________________
Second National Investors Corporation________________________
Servel (Inc.)_____ _____________________ ________________________
Sharp & Dohm e ( I n c . ) ...____ ________________________________
Shattuck (Frank G.) C o_______________________________________
Shell Union Oil Corporation_______________ ___________________
Shell Union Oil Corporation, preferred........................................... .

Statistics in regard to short selling, N ew Y ork Stock Exchange— Short positions in individual issues A pril 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
Apr. 1

Sinclair Consolidated Oil Corporation i . . . . . . . -------- -------- --------Sinclair Consolidated Oil Corporation, preferred 1__________________
Skelly Oil C o. ______________________________________ ___________
Skelly Oil C o., preferred, w ithout warrants. _______________________

Apr. 6

Apr. 7

A pr. 8

399

300

325

125

40
100
100
6,193

100
7,060

100
6,360

100
5,860

100
300
4,260

100
350
4,094

100
350
3,844

7,948
630
80
200
20
600
25

7,298
700
180
200
20
100
25

200
11,334
6,887
165
10
2,756
46,472
50
200
10

775

1,125

100
40

100
5,520

4,365

3,760

3,450

100
350
4,144

300
350
3,499

2,203

3,411

7,578
600
80
200
20
100
75
15
200
5,368

7,671
350

6,771
450

200
10,869

7,993
700
180
200
20
100
75
15
200
7,190

2,590
75
7,056
400

3, 331

7,633
700
180
200
20
100
25
15
200
8,135

6, 657
215

30
8, 177
140

30
8,052
240

2,591
46, 997
50

2,511
47,754
50

7,426
200

100
40

5,530

5,010
50

3,965

4,765
50

4,358
50

9,392
315

8,731
415
100

2,101
44,726
50

945
43, 977

9,146
315
100
10
1,925
54,130

9,171
235
100

2,121
47,475
50

8,886
390
150
10
1,262
58,474

400
1,830
1,411
56
276
2
90

250
790
1,310
56
276
2
90

45
723
870
120
240

255
1,723
1,225
236
365

1,698
1, 295
186
365

1,898
1,295
151
345

2,048
1,195
121
245

325
1,560
1,255
56
270

Superheater Cos (T h e)_____ __________________________________ _______

A pr. 12

1,175

Sterling Securities Corporation, $3 first preferred________________ . . .
Stewart-Warner C orporation______________ . . . ...... ...........
Stone & W ebster (I n c .).___________ _________________________________
Studebaker Corporation___________ _____________ ________________
Studebaker Corporation preferred___________________________________
Sun Oil C o _______________________________________________ __________

1 Stricken from the list Apr. 1, 1932.

A pr. 11

3,500
72, b06

200
150
1,305
1,110
46
276
90

PRACTICES

524
33,853
163
300

Apr. 9

EXCHANGE

Spicer Manufacturing Corporation______________________________ . . .
Spiegel M ay Stern Co. (In c.)____ _____________________________ ______
Standard Brands (In c.)______________ ____________________ __________
Standard Brands (Inc.), preferred___________________________________
Standard Commercial Tobacco Co. (In c.)_________ ________ ________
Standard Gas & Electric C o ____ __
___________ __________________
Standard Gas & Electric C o., $4 preferred_________ ________________
Standard Gas & Electric C o., $6 preferred______________ ____________
Standard Gas & Electric Coi, $7 preferred_______________________ . . .
Standard Oil of California (D elaw are)___ _____________________
...
...
Standard Oil C o. of N ew Jersey________________ . . ___________
Starrett (The L . S.) C o_________ ___________________________________
Sterling Securities Corporation, class A ___ _______ _______ . . . ____

A pr. 5

STOCK

Snider Packing Corporation_______________________ ________________
Snider Packing Corporation, preferred______________________________
Socony-Vacuum Corporation . . . . .
. . . . . __________
_ ___
Solvay American Investm ent Corporation, pieferred, without
warrants_______________________________ _________ __________ ______
South Porto R ico Sugar C o .. _____________________________
_____
Southern California Edison Co. (L td .)____________________ . . . ___
Southern Dairies (Inc.), class A ____________________ _______________
Southern Pacific C o _______________ ________________
____________
Southern Railway C o ___ __ _ . ______ ___________________________
Southern Railway Co., 5 per cent preferred_________________________
Spalding (A . G.) & B r o s ...____ ___________________________
______
Spalding (A . G .) & Bros., first preferred____________________________
Sparks-W ithington (The) C o _______________________________________

Apr. 4

150
10

Tennessee Corporation------- ----------------- -----------------------------------------Texas (The'), Corporation--- ------------------------ -----------------------------------Texas Gulf Sulphur C o____ _______________________ ________________

100
450
4, 518
1,483
200

450
5, 041
2,358
200

100
100

loo
100

100
100
10

10
450
4, 612
2,363
200
60
200
100
10

10
450
3,651
2,488
200
50
200
100

10
450
3, 722
2,793

Texas Pacific Land Trxist certificates subscription shares___________
Thatcher Manufacturing C o _____________________________ ______ ____
T hird Avenue Railw ay C o ------------------------ ---------------------------------------

10
450
4,301
2,343
200

Superior Steel Corporation_________________________________ ________
Symington Co-, class A __ __ . . . . . ______ - . . . ___ __ . . . . .

150
100
100

130
100
100
200

180
100
100
100

250
100
100

216
510
350
100

50
1,000
450

50
600
250

50
100
250

50
500
250

2,980
6,875
1,100
o-jn
715
425
200
25,106
500
12, 202
2
100
6, 661
125

2,705
7, 075
1,000
450
1,865
450
200
20, 051
500
11, 722

2,485
6,500
600
475
1, 745
350
200
19,952
500
11, 294

3, 395
4,450
600
470
2, 675
325
200
21,645
700
11,875

7,725
175
100
460
13, 371
504
4
150
4,266
19, 803
364

6, 277
225
100
410
11,916
573
4
50
4, 056
15, 777
214

5, 453
285

20
375
20
1, 050
150
200
10
355
2,375
412
113

475
10
1,100
150
200
10
155
1, 975
125
260

216
10
350
100

Tim ken-Roller Bearing C o. (T h e )____ _____________________________
Transamerica C orporation.. _______________________________________
Tri-Continental Corporation______________________ _______________
Tri-Continental Corporation, preferred_____________________________
T rico Products Corporation _______________________ _____ ________
Underwood Elliott Fisher C o. ---------------- ---------------------------------------

100
216
10
390
100
20
6,630
10,125
500
125
100
850

7,835
10,125
400
170
245
650

7,365
10,425
400
170
715
650

216
510
350
100
10
7,315
10, 525
1,500
320
715
550

Union Carbide & Carbon C orp ora tion ___ _____________________ . . .
Union Oil Co. of California____ _____________ . . ______________ . ..
Union Pacific R . R . C o __________ . .
. . ____________ . . . ______

34,528
1,704
14,195

37, 332
1,704
14, 923

35,124
1,634
12, 826

33, 296
1,634
13, 660

6,855
9,795
1,500
295
715
425
200
31, 182
1, 204
12, 671

United Aircraft & Transoprt Corporation____________ ____________
United Aircraft & Transport Corporation, preferred, without warrants.

5,836
225
60
472
32, 148
1,182

4, 627
425
60
430
29, 879
1,142

4, 304
232
160
410
26, 288
1,167

5,231
225
100
410
24,154
1, 158

100
4, 876
225
100
610
26, 455
1, 285

Thom pson Products (In c.)______________________________ __________
T ide Water Associated Oil C o .. . . . --------------------------------------------Tide Water Associated Oil Co., preferred___________________________

United Carbon C o ____ _________ _________________ . . ________ ..
United Corporation______ . . . ______________________________ _____
United Corporation, preferred_________
______________ ________ .

635
14,156
954
4
100
1,732
16, 788
271

United
United
United
United

Eiectric Coal Companies__________ _________ ______ . . . . . .
Fruit C o _____________
________________________ _____
Gas & Im provem ent C o_____________________________________
Gas & Im provem ent Co. preferred _______________ ________

100
1, 859
17, 629
10
100

150
1,464
15, 305
110
100

100
1,294
22,115
110
100

100
1,561
25, 094
110
100

200
1, 601
18,709
210
100

United
United
United
United
United
United
United
United
United
United

States Gypsum C o---------------------------------------------------------------States Gypsum Co., preferred. _____________________________
States Industrial Alcohol C o____ . _________ ____ ________
States Leather C o., voting trust certificates.__ ____________
States Leather Co., preferred voting trust certificates_______
States Leather Co., class A voting trust certificates_________
States Pipe-& Foundry C o____ ______ .
________ . . .
States Realty & Im provem ent Co _________ . . . ___________
States R ubber C o___________________________________________
States R ubber Co., preferred. ...... ................... .................... .

315

290

190

375

2,266
50
100
10

2, 301
150
300
10
31C
500
1, 452
763

290
10
1, 825
150
ICO
10
320
900
1, 432
163

I, 970
150
100
10
670
2,975
1, 472
263

2, 115
150
100
10
490
3, 275
1,672
263

1, 530
150
100
10
330
2, 975
887
113

400
1,292
163

460
10, 931
463
4
3,895
15, 678
464
625
1, 305
150
100
10
185
1, 775
242
113

PRACTICES

10
100
10
450
2, 547
1,938

EXCHANGE

10
100
10
450
2,407
2,273

STOCK

10
100
10
450
2,462
2,698

Statistics in regard to short selling, ’New* Y ork Siock Exchange— Short positions in, individual issues A pril 1, 4, 5, 6, 7, 8, 9, 11, and
12, 1932— Continued
A pr. 4

Apr. 1

14
352

14
427

40
4,420
3,860
45
14
70
225
735

40
3,670
3,650
45
200
5
80
225
710

Virginia-Carolina Chemical Corporation, 7 per cent preferred_______
Virginia-Carolina Chemical Corporation, 6 per cent preferred-...........

100
2,280
50

100
2,880
50

W ilson & Co. (Inc.), preferred.......................- .............................................

A pr. 8

A pr. 9

A pr. 11

Apr. 12

750
100
364, 260
12,122

450

560

361, 698
13,352

356, 454
11, 777

337, 798
12,232

310
20
324, 977
11,922

290
20
317, 944
11,862

14
677
90
40
3,785
3,512
45

39
1, 047
90
45
3,810
4,822
45

39
742
90
45
3,658
5,915
45

25
614
90
30
3,994
6,150

40
649
90
30
3,444
6,850

56
634
90
30
3,338
7, 032

701
90
30
3,438
7,377

70
225
635

25
70
300
635

25
90
200
589

25
50

25
20

25
25

609

1,029

1,005

100
2,405
50

970
8

100
2,229
50

494
50

794
50

544
50

103
75
10

3
75
10

21
75
10
25

500
20
310, 710
14,147
100

100

474

343

650

710

660

1,260

1,160

1,755
50
400
103
75
1,110

21
4

825
2
32,346
1,652
139,800

34
8
8
8
625
2
30,623
1,652
126,850

16
17
694
12.
29,651
1,021
123, 769
11
100
5
50
200
300
298
100
100
100

1
315
12
27,462
242
113,889
25

17
1
140
12
28,812
521
106,451
10

2
1
440
2
27,597
446
110,120
20

100
5
50
100
500
298
100
100
100

6
7
625
12
29,766
1,521
125,107
10
100
5
50
100
400
298
100
100
100

7
440
12
29,967
121
115,744
1

100
5
50
200
500
298
100
100
100

6
8
625
12
29,563
1,621
124, 665
10
100
5
50
100
500
298
100
100
100

50
140
200
500

5
50
440
200
500

5
50
390
200
530

5
50
540
100
500

ioo

200

100

PRACTICES

W ilcox (H F.) Oil & Gas C o________________________ ________ ______

A pr. 7

EXCHANGE

450
363, 436
12,165

A pr. 6

STOCK

540
386,422
13,805

United States Smelting, Refining & M ining C o., preferred__ _______

Apr. 5

“^1

W oolworth (F . W .) C o _____________________________________
W orthington Pum p & M achinery Corporation_____________
W orthington Pum p & M achinery Corporation, preferred B_
W rigley (W m .), jr., Co. (D elaw are)________________________
Yellow Truck & Coach Manufacturing Co., class B ________
Yellow Truck & Coach Manufacturing Co., preferred______
Young (L. A.) Spring & W ire Corporation_________________
Youngstown Sheet & T ube Co., U nstp_____________________
Zenith Radio Corporation__________________________________
Zonite Products Corporation_______________________________

550
144

100

740
144

100

54,963

51,863

1, 010

50
1, 770
144
10

50
2,050
174

100

49, 334
1,005
50
1,750
144

10
100

125

125
35

3, 279, 398
-1 9 , 870
590
1, 500, 000

3,189, 596
-89,802
592

3, 059, 658
-129,938
602

3, 063, 927
+ 4, 269
608

1, 600, 000 } 1,500,000
59,300
89,300
107, 900
5.93
5. 95
6.74

2,100,000

2, 849, 895
-2 14 , 032
603
1, 800, 000

126, 000

101,800

6.00

5. 66

44,349
1,247
50
494
134

100

42, 654
1,155
50
2,780
34

100

42,044
1,022
50
2,745
134

100

105, 900

Per cent of short sales covered the same day to total transactions.

7.06

1,000,000

40,134
977
" 2 ,‘ 460
44

100

125
45

225

175

2,626, 399
-223, 496
538

2, 605,821
-20,568
548

2,405,319
-6 3 , 768
534

2,100, 000

1,100, 000

2,469,087
-136, 744
543
1, 700, 000

116, 600

66,700

90,400

103,000

5.55

6.06

6.32

6.87

125

N um ber of shares sold short and covered the same day__________

1,500, 000

EXCHANGE
PRACTICES

56, 703

STOCK

N um ber of shares of total short interest_________________
N et change, plus or m inus____________________________________
Total number of stocks in which a short interest was reported.
Total shares traded in on New York Stock Exchange_________

51,853
1,600

-'•I
Cl

STOCK EXCHANGE PRACTICES

E x h ib it No. 28, A pril 21, 1932
(See p. 286, this hearing)
R e q u ir e m e n t s C o v e r in g F ix e d I n v e s t m e n t T b u s t s
C o m m it t e e on S to c k L i s t , N e w Y o r k S to c k E x c h a n g e
r e q u ir e m e n t s fo r l i s t in g a p p l i c a t io n s

A u g u s t 1, 1931.
The committee will meet Mondays at 3.15 p. m.
An application, conforming to these requirements, signed by an executive
officer of the applying corporation, voting trustees, or depositary committees,
and 14 printed or typewritten copies must be filed with the committee on stock
list at least six days prior to the date set for consideration. Four preliminary
drafts of such application must be filed at least 12 days prior to date set for
consideration.
Applications must be accompanied by the required papers and agreements,
and by check to be drawn to the order of the “ Treasurer, New York Stock Ex
change.” The method of computing fees is given in Appendix A. In addition,
companies making application are required to pay cost of printing. Printers*
bills will be submitted directly to the applicant.
An application for listing governmental, State, county, or municipal securi
ties must be signed by a properly accredited official or by financial representa
tives, and be accompanied by required check, as above, and papers.
Specimen application furnished on request.
The employees of the committee on stock list are instructed to assist in the
preparation of applications to list whenever so requested. No charge will be
made for such service.
REQUIREMENTS FOR ORIGINAL LISTING

Stock
Every application for an original listing of capital stock shall recite:
(Jl)
Where incorporated.
(B) (1) Amount applied for (whether temporary or permanent certificates) ;
(2) authorized issue.
(C) (1) Date of charter; (2) duration.
(B ) (1) Business; (2) special rights or privileges under charter or by-laws:
(i?) (1) Whether capital stock is full paid; (2) nonassessable; and (3>
whether liability attaches to shareholders.
(F)
(1) Issues (by classes), dividend rate and par value; (2) total amount
of each, authorized and issued; (3) increases and authority therefor, including
(a) action by stockholders, (6) by directors, and (c) by public authorities,
etc.; (4) amount unissued, (a) options or contracts on same, (6) specific
reservation for conversion.
((?) If preferred stock; (1) whether cumulative or noncumulative; (2) pref
erences, including (a) voting power; (&) dividends; (c) distribution of assets
on dissolution or merger; (d) redemption; (e) convertibility; (f) special
provisions.
(H ) Voting power of obligations of debt.
(I) (1) Purpose of issue; (2) application of proceeds; (3) amount issued
for securities, contracts, property; description and disposition; (4) additional
property to be acquired, with particulars, as required by paragraph (N).
(J) (1) History of corporation; (2) of predecessor companies or firms,
with location and stock issues by classes; (&) conditions leading to new
organization.
(K ) Tabulated list of constituent, subsidiary, owned, or controlled companies
showing (a) date of organization; (b) where incorporated; (c) duration of
charter; (d) business, and (e) capital stock issues (by classes), par value,
amount authorized, issued, owned by parent company.
(L) (1) Mortgage, and (2) other indebtedness showing (a) date, (&) ma
turity, (c) interest rate, (#) convertibility, (e) redemption by sinking fund
or otherwise, ( f ) amount authorized, and {g\ amount issued: (3) similar
information regarding mortgage and other indebtedness of constituent. sub
sidiary, owned, or controlled companies.

STOCK EXCHANGE PRACTICES

(M ) Other liabilities, joint and several, (1) guaranties, (2) leases, (3) traffic
agreements, (4) trackage agreements, (5) rentals, (6) car trusts, etc., (7)
terms of each and provision for payment, (2) similar description of other
agreements or easements, (9) similar information as to constituent, subsidiary,
owned, or controlled companies.
(N) (1) Description, location, nature and acreage of property, (a) owned in
fee; (6) controlled; (c) leased; (2) railroads, mileage completed, operated and
contemplated; (3) equipment; (4) character of buildings and construction;
(5) tabulated list of franchises showing (a) where granted, (6) date, (c) dura
tion, (d) purpose; (6) timber, fuel or mining lands, water rights; (7) similar
information as to constituent, subsidiary, owned or controlled companies.
(0 ) Policy as to depreciation.
(P) (1) Character and amount of annual output for preceding five years;
(2) estimated output (character and amount) for current year ; (3) number of
employees.
'
(0 ) (1 ) Dividends paid or declared; (2) by predecessor, and constituent,
subsidiary, owned or controlled companies.
(R) Financial statements; (1) earnings for preceding five years, if available
with interest charges, depreciation and Federal taxes; (2) income and surplus
account of recent date for at least two years, if available; (3) balance sheets
of same dates; (4) balance sheet giving effect to recent financing, if any; (5)
similar accountings for predecessor, constituent, subsidiary, owned or controlled
companies; (6) corporation consolidated within one year previous to date o f
application, income and surplus account and balance sheet of all companies
merged and balance sheet of applying corporation; (7) if in hands of receiver
within one year previous to date of application, (a) income account and bal
ance sheet of receiver at time of discharge if available, (6) balance sheet at
close of receivership if available, and (o) balance sheet at date of reorganization*
(8) Agreements contained on pages 5 and 6.
(T) Fiscal year.
( V) Place and date of annual meeting.
(F) Location of principal and other offices.
(TP) Names of (1) directors, classified, with addresses; (2) officers; (3)
transfer agents, with addresses, (4) registrars, with addresses.
In addition to the above, applications from corporations which own or operate
mines must recite:
(4 ) Patented and unpatented claims, by numbers.
(B) (1) Geological description of country; (2) location and description oi
mineral and other lands; (3) ore bodies; (4) acerage value of ore; (5) chap
acter and analysis; and (6) methods of treatment.
(C) History of workings, (1) results obtained; (2) production each year.
(D) (1) Ore reserves compared with previous years showing separately as
to character and metal content; (2) estimate of engineer as to probable life o f
mines; (3) probabilities by further exploration.
(E) (1) Provisions for smelting and concentration; (2) proximity of property
to railway or other common carrier.
(F) Properties in process of development; income account if available; guar
antees for working capital and for completion of development in event income
account not available.
(G) Total expenditures for preceding five years for acquisition of new prop
erty, development, proportion charged to operations each year.
(JT) (1) Policy as to depletion; (2) acquisition of new property; (3) new
construction and development.
(J) Production by tons, number of tons of ore treated, average assay yield,
percentage of extraction, recovery per ton of ore, for preceding five years, if
available.
In addition to the above, applications from corporations which own or operate
oil and gas wells must recite:
(A) (1) Brief history of oil field; (2) geological description of country; (3)
character and gravity of oil.
(B) (1) Total area of oil land (developed and undeveloped), (a) owned,
(b) leased, (c) controlled, (d) proven, (e) under exploitation, (f) royalties.
(0 ) (1) Number of wells (oil or gas) on each property, (a) in operation,
(b) drilling, (c) contemplated, (2) average depth of wells drilled, (a) shallow
est, (&) deepest, (c) probable life ; (3) whether oil sands are dipping.
119852— 33—APP.------ 6

STOCK EXCHANGE PRACTICES

(D) (1) Gross daily production—initial and present; (2) annual gross pro
duction from each property for preceding five years, if available; (3) estimated
gross production for current year.
(E) (1) Storage, capacity, and location; (2) (a) amount of oil stored, (6)
character, (c) value, (3) pipeline, (a) gauge, (6) capacity, (c) mileage.
(F ) (1) Refineries, (a) capacity, (6) acreage, (c) employees, (d) products
and by-products.
(Cr) Properties in process of development; income account if available; guar
anties for working capital, and for completion of development in event income
account not available.
{H) Total expenditures for preceding five years for acquisition of new prop
erty, well drilling, and development, proportion charged to operations each year.
(I)
(1) Policy as to depletion; (2) acquisition; and (3) development of new
properties.
(N ote.—For requirements as to voting trust or stock trust certificates, or
certificates of deposit, see p. 4.)
Bonds
An application for an original listing of bonds shall recite all information
required for listing stock, and
(A ) (1) Full title; (2) amount applied for (whether temporary or perma
nent), denominations, and numbers; (3) amount authorized and outstanding
authority therefor, including (a) action by stockholders, (6) directors, and
<o) public authorities, etc.; (4) whether bonds are coupon (registerable as to
principal) or registered, interchangeable or exchangeable; (5) exchangeability
or convertibility into other securities, and terms.
(B ) Names and addresses of trustees.
(0 )
(1) Date of issue and maturity; (2) interest rate; (3) places at and
dates for payment of interest and principal; (4) where registerable or trans
ferable; (5) kind and standard of money, and options; (6) tax exemptions;
(7) whether redeemable or purchasable in whole or part by sinking fund or
otherwise, showing (a.) dates, (6) price, (c) duration and place of published
notice; (8) specified reservation of stock for conversion.
(D) Provisions for declaration of principal due and payable in event of
default of payment or interest, or other defaults, and waiver; percentage of
outstanding bonds controlling trustee.
The committee will object to any provision in an indenture whereby the
consent of more than 30 per cent of the outstanding bonds is necessary to
initiate any action by the trustees which may appear necessary for the pro
tection of bondholders, subject, however, to the limitation that there is no
objection to a provision by which the action of a majority in amount of such
bonds will rescind any minority action.
(E) Purpose of issue and application of proceeds, similar to that called for
by paragraph (I) of the requirements for listing stock; provisions as to
additional issue.
(F ) Disposition of bonds refunded, redeemed, or purchased for sinking fund,
and mortgage securing same.
(O)
Mortgage or indenture provisions for (1) serial issues; (2) values in
United States gold coin; (3) issuance in foreign languages and (4) that the
English version governs: (5) terms of exchangeability of bonds payable in
foreign places for bonds payable in United States or vice versa.
(H ) (1) Security—mortgage, indenture of trust, or other agreement; and
(2) liens, (a) properties covered, (&) mileage of railway lines, (c)buildings,
(d) equipment, (ej securities, (f) rights, (g) privileges, (h) titles, (i ) fran
chises. O) leases, etc.; (3) other liens covering same or any part of same
properties; (4) guaranty and terms.
(7)
Any unusual provisions or covenants contained in mortgage, or deed of
trust.
R E Q U IR E M E N TS FOR L IS T IN G OF AD D IT IO N A L A M O U N T S

Refer to previous applications and last application by number and date,
and recite:
(A) Where incorporated.
(B ) (1) Amount applied for; (2) amounts authorized and outstanding; (3)
authority for issue, including (a) action, by stockholders, (6) by directors, and
(c) by public authorities, etc.; (4) total amount applied for.

STOCK EXCHANGE PRACTICES

(O) (1) Purposes of issue; (2) application of proceeds; (3) amount, de
scription, and disposition of securities exchanged for new issues; (4) additional
property acquired or to be acquired, with particulars as required by paragraph
(N) on page — .
(D)~ Dividends paid and declared since previous application.
(E) Changes, if any, in (1) charter; (2) by-laws; or (3) capitalization since
previous application.
(jF )
Changes in property, if any, since previous application.
(0) (1) Character and amount of output since previous application or earn
ings as in application for original listing; (2) estimated output (character
and amount) for current year; (3) number of employees.
(H) Income account, surplus account, and balance sheet of recent date, also
for constituent, subsidiary, owned or controlled companies, or a consolidated
income account, consolidated surplus account and a consolidated balance sheet.
(1) Policy as to depreciation and depletion.
(J) Fiscal year, place, and date of annual meeting, location of offices, and
names of officials as covered by paragraphs (T ), (U ), (V ), and (W ) on page — .
(Norn—In cases where it is desired to list additional stock to an amount in
excess of the total number of shares authorized by charter or certificate of
incorporation, as reported in the most recent application on file, such additional
stock may not be added to the list until at least 30 days after the receipt of
notice of the actual or proposed increase in authorization.)
REQUIREMENTS f o r l is t in g o f c e r t if ic a t e s o f d e p o s it , v o t in g tbtjst , o f s t o c k
TRUST CERTIFICATE, ETC.

Every application for the listing of certificates of deposit, voting trust, or
stock trust certificates, etc., shall recite:
(4 )
(1) Name of applicant; (2) amount applied for (whether temporary
or permanent certificates); (3) depositary; (4) security deposited, and whether
listed; (5) registrar.
(B) (1) Date of agreement; (2) names of committee, or voting trustees;
(3) affiliations of committee or trustees; (4) terms of trust; (5) powers and
duties of committee, trustee, or depositary.
(C) Reasons for deposit.
(D) (1) Duration of trust or deposit; (2) extensions or limitations; (3)
final date of deposits; (4) provision for deposits without penalty for approxi
mately 30 days after listing, or if no time limit for deposit of securities without
penalty is fixed, an agreement that approximately 30 days’ notice of such
limitation of time shall be published and given to the stock exchange; (5)
date of presentation of plan; (6) provisions for dissent and withdrawal; (7)
percentage necessary to adoption; (8) pro rata, charges; (9) provisions for
return of securities (or equivalent) ; (10) provision for payment of interest,
dividends, etc.
(E) Applications to list voting trust or stock trust certificates to recite
financial statements of company as in paragraph (R) on page — .
(F) Agreement to deliver definitive securities at termination of voting
trust or voting trust to be extended.
•
(0) Agreement to have definitive securities listed.
(H)
Agreement by voting trustees to have company publish its financial
statements.
(1) Agreements contained on pages 5 and 6.
(Non®.—Applications to list voting trust or stock trust certificates and cer
tificates of deposit for securities not a delivery on the stock exchange, must,
in addition, comply with the requirements.)
PAPKES TO BE FILES) W ITH APPLICATIONS

In addition to application for listing, the following papers must be filed.
For stocks:
1. Three copies of charter, with amendments to date, one copy attested by
proper public authority.
2. Three copies of by-laws, with amendments to date, one copy attested by an
executive officer of corporation.
3. Three copies of leases, franchises, easements, and special agreements, one
copy of each attested by an executive officer of corporation.

STOCK EXCHANGE PRACTICES

4. One copy of resolutions of stockholders and directors and copy of proper
public authority authorizing issue, each attested by an executive officer o f
corporation.
5. One copy of resolutions of stockholders or directors and copy of proper
public authority authorizing issue of stock on conversion or other securities,,
attested by an executive officer of corporation.
6. One copy of resolutions of stockholders or directors directing specific reservation of authorized stock for conversion, attested by an executive officer o f
corporation.
7. One copy of resolutions of stockholders, board of directors, or executive*
committee attested by an executive officer of corporation, authorizing, by namer
official to appear for listing securities (form may be had on application). .
8. Opinion of counsel (not an officer or director of the corporation) as to
legality of (a) organization, (6) authorization, (o) issue, and (d) validity o f
securities. The committee will not accept the opinion of an officer or director
of an applying corporation nor of a firm in which the officer or director is a,
member as counsel on any legal question affecting the corporation; nor will it
accept the opinion of an officer or director of a guarantor corporation nor of &
firm in which the officer or director is a member on any legal question affecting
the issuance of guaranteed securities.
9. Eight copies of detailed distribution of securities, one certified (form may
be had on application).
10. One copy of resolution appointing transfer agent and registrar, attested
by an executive officer of corporation.
11. Certificate of registrar of amount of securities registered at date o f
application.
12. Report of qualified engineer covering actual physical condition of property
at recent date.
13. Map of property and contemplated extensions.
14. Specimens of all securities to be listed.
15. Questionnaire (form may be had on application).
16. Certified copy of income accounts, surplus accounts, and balance sheets
contained in application.
17. Agreements.
18. Certified copy of printed circular issued by bankers describing security, if
available.
19. In the listing of an original application a letter containing the following
information:
(A ) Volume of trading (total number of shares traded for at least a 2-week
period);
(B) State where stock is traded (give name or names of exchanges, or,, if not
listed, state s o );
((7) State price (bid and offer—also high and low for year); and
(D) Name bankers (if none, state so).
For bonds:
20. All papers required for listing stocks and also four copies of the mort
gage, indenture, and/or agreement. One copy of the mortgage or indenture
(a) certified to by trustee, (&) with, copies of all certificates of proper re
cording, and (c) one copy of agreement certified by any party thereto.
21. Trustees’ certificate required on page 7.
22. One copy of resolutions of stockholders or directors, and copy of proper
public authority, authorizing issue of stock on conversion of bonds, attested by
an executive officer of corporation.
23. One copy of resolution of stockholders or directors directing specific reser
vation of authorized stock for conversion, attested by an executive officer o f
corporation.
24. Certificate of disposition of securities redeemed or refunded.
25. Certificate as to collateral deposited.
26. Certified copy of release or satisfaction of underlying mortgages.
For securities of reorganized corporations.
1.
All papers required for listing stocks and bonds. Opinion of counsel shall
state that proceedings have been in conformity with legal requirements; that
title to property is vested in new corporation and is free and dear from all
liens and incumbrances except as distinctly specified; and also as to equities of
securities of predecessor corporation.

STOCK EXCHANGE PRACTICES

2. Certified order of court confirming sale on foreclosure or other authority
.for reorganization.
3. Certified copy of plan of reorganization.
4. Certified income and surplus account and balance sheet at close of receiver*
■ship, if available.
5. Certified balance sheet at date of reorganization.
For additional amounts:
1. Nos. 4, 5, 6, 7, 8, 9 ,1 1 ,1 5 ,1 6 ,1 7 ,1 8 of papers required for original listings.
2. Nos. 1, 2, 3 ,1 0 ,12 ,1 4 of said papers for stock, if any changes have occurred
therein since previous application.
3. Nos. 1, 2, 3, 12, 14, 20, 21, 22, 23, 24, 25 of said papers for bonds, if any
•changes have occurred therein since previous application.
4. Certified copy of proper public authority for increase.
For certificates of deposit, voting trust, etc.:
1. Papers required for listing stocks and bonds.
2. Certified copies of any legal proceedings and court orders.
3. Three copies of deposit or trust agreement, one certified to by proper
.authority.
4. Three copies of circulars, issued by trustees or committee, one certified to
by proper authority.
5. Certificates of amounts deposited.
AGREEMENTS

To be made part of applications where applicable:
1. To notify the New York Stock Exchange promptly of any change in the
general character or nature of its business.
2. To notify the New York Stock Exchange immediately if it or any subsidiary
-or controlled company should dispose of any property or of any stock interest
in any of its subsidiary or controlled companies, when such disposal would
impair or materially affect its financial position or the nature or extent of its
operations as theretofore conducted.
3. To publish periodical statements of earnings, as agreed upon with the
committee.
4. To publish at least once in each year and submit to stockholders at least
15 days in advance of the annual meeting of the corporation a ba.lance sheet
and income statement for the last fiscal year, and a surplus statement of the
applicant company as a separate corporate entity and of each corporation in
which it holds, directly or indirectly, a majority of the equity stock, or in lieu
thereof eliminating all intercompany transactions.
A similar set of consolidated financial statements. If any such consolidated
statements exclude any companies a majority of whose equity stock is owned,
(a.) the caption wiil indicate the degree of consolidation; (&) the income
account will reflect, either in a footnote or otherwise, the parent company’s
proportion of the sum of or difference between current earnings or losses and
the dividends of such unconsolidated subsidiaries for the period of report;
and (c) the balance sheet will reflect, in a footnote or otherwise, the extent
to vfhich the equity of the parent company in such subsidiaries has been in
creased or diminished since the date of acquisition as a result of profits, losses,
and distributions. Appropriate reserves, in accordance with good accounting
practice, will be made against profits arising out of all transactions with uncon
solidated subsidiaries in either parent company statements or consolidated
statements.
Such statements will reflect the existence of any default in interest, cumula
tive dividend requirements, sinking fund or redemption fund requirements of
any controlled corporation, whether consolidated or unconsolidated.
5. To publish all future annual financial statements of any character in the
form contained in the listing application and, in the publication of reports of
earnings for any period of less than a fiscal year, to show net profits in the
aggregate and per share of each class after depreciation, depletion, income
taxes, and interest, estimating the proportionate amount of these items as
accurately as may be if not finally determined at date of publication.
6. Not itself, and not to permit any subsidiary, directly or indirectly con
trolled, to take up as income stock dividends received at an amount greater
than that charged against earnings, earned surplus, or both of them, by the
issuing company in relation thereto.

STOCK EXCHANGE PRACTICES

7. Not to make any change in depreciation policies as described in the appli
cation and not to make any substantial change in any percentages therein re
cited as applicable to particular classes of property without notifying the stock
exchange and without calling attention to such changes in the next succeeding
published report, and, if this be an interim report, also in the next succeeding
annual report.
8. To maintain in accordance with the rules of the stock exchange, a transfer
office or agency in the Borough of Manhattan, city of New York, where all listed
securities shall be directly transferable, and the principal of all listed securities
with interest or dividends thereon shall be payable; also a registry office in the
Borough of Manhattan, city of New York, south of Chambers Street, other than
its transfer office or agency in said city, where all listed securities shall be
registered. If its transfer books should be permanently closed, to continue to
split up certificates of listed stock into smaller denominations in the same
name so long as such stock shall be retained upon its list by the New York
Stock Exchange. If its transfer office or agency should be or should become
located north of Chambers Street, to arrange, at its own cost and expense that
its registry office will receive and redeliver all securities deposited at such
registry office for the purpose of transfer.
9. Not to add to the number of its transfer agencies nor to make any change
of a transfer agency, or of a trustee of its listed bonds or securities, without
prior notice to the committee on stock list, and not to add to the number of
registrars of its listed stock nor to change a registrar of its listed stock without
the prior approval of the committee on stock list, nor to select an officer or
director of the company as a trustee of its mortgages or other listed securities
unless such officer or director be a cotrustee for an issue having a corporate
trustee.
10. Not to make any change in the form or nature of its listed securities or in
the rights or privileges of the holders thereof, without having given 20 days'
prior notice to the committee on stock list of such proposed charges, and having
made application for the listing of the securities as changed, if the committee
on stock list so requires.
11. To notify the stock exchange in the event of the issuance or creation in
any form or manner of any rights to subscribe to, or to be allotted, its securities,
or of any other rights or benefits pertaining to ownership in its securities, and
to afford the holders of its listed securities a proper period within which to
record their interests and to exercise their rights, and to issue all such rights in
form approved by the stock exchange and to make the same transferable, pay
able, and deliverable in the Borough of Manhattan, city of New York.
12. To notify the stock exchange promptly in the event of issuance of options
or warrants to purchase stock, otherwise than (a) pro rata to stockholders,
(6) to officers and employees under general employees’ stock-purchase plan,
(c) firm offers of stock to be taken in a block within four months from the date
of such offer, of the number of shares covered by such options, of their terms
and of the 3me within which they may be exercised and of any subsequent
changes therein and thereafter to include this information together with like
information as to any options in existence at the time of approval of this
application so long as said options are outstanding, in all annual financial
reports furnished to stockholders and in all formal published reports.
13. To make application to the stock exchange for the listing of additional
amounts of listed securities sufficiently prior to the issuance thereof to permit
action in due course upon such application.
14. To publish promptly to holders of listed stock any action in respect to
dividends on shares, or allotments of rights for subscription to securities, notice
thereof to be sent to the stock exchange, and to give to the stock exchange at
least 10 days’ notice in advance of the closing of the transfer books, or exten
sions, or of the taking of a record of holders for any purpose.
15. To forward to the stock exchange copies of all notices mailed to stock
holders looking toward charter amendments, and to file with the stock exchange
two copies of amended charter or resolutions of directors in the nature of
amendments (one of which must be certified) as soon as such amendments or
resolutions have become effective.
16. Not to purchase listed preferred stock for retirement at a price in excess
of that at which the stock purchased might then be obtained in the open market
and not to select preferred stock for redemption otherwise than pro rata or by

STOCK EXCHANGE PRACTICES

lot; to notify the stock exchange immediately and at least 15 days in advance
of any such redemption, and to furnish to the stock exchange any information
requested in reference to such redemption.
17. To notify the stock exchange of the change or removal, to a substantial
extent, of collateral deposited under any of its mortgage or trust indentures
under which listed securities are outstanding.
18. To have on hand at all times a sufficient supply of certificates to meet
the demands for transfer.
19. If at any time the stock certificates of the company do not recite the
preferences of all classes of stock the company agrees with the exchange that
it will furnish stockholders, upon request and without charge, with a printed
copy of the preferences of all classes of stock.
20. To furnish the New York Stock Exchange, on demand, such reasonable
information concerning the company as may be required.
SPECIAL AGREEMENTS

There are separate forms of agreements for voting trusts, investment trusts*
and bankers applying for the listing of American certificates for foreign bearer
shares, copies of which will be furnished upon request
The committee recommends a date be fixed as record for dividends, allotment
of rights, and stockholders’ meetings without closing the transfer books.
Notice of rights, allotments, subscription privileges to bondholders and share
holders should be as of a date after authorization.
t r u s t e e s o f m o r tg a g e s

The committee recommends that a trust company or other financial corpora
tion be appointed trustee of mortgages, indentures, and deeds of trust; and
when a State law requires the appointment of an individual as trustee, a trust
company or other financial corporation be appointed as cotrustee.
Each mortgage, indenture, or deed of trust should be represented by a sepa
rate trustee.
The committee will not accept as trustee (a) an officer or director of the
issuing corporation, (&) a corporation in which an officer of the issuing cor
poration is an executive officer.
The trustee shall present a certificate accepting the trust and certifying
(1) securities are issued under the terms of the mortgage or indenture, giving;
the numbers, denominations, and amount authenticated; (2) collateral de
posited; (3) disposition of prior obligations. For additional issues of bonds
the trustee must certify that (1) increase is in conformity with terms of mort
gage or indenture, giving numbers, denominations, and amount authenticated;
(2) additional collateral deposited; and (3) disposition of prior obligations.
The company and trustee shall notify the stock exchange of the holding, can*
cellation, or retirement of securities, by redemption, through the operation of
sinking fund or otherwise.
The trustee must notify the stock exchange if deposited collateral is changed
or removed and furnish a list of collateral substituted.
A change of trustee shall not be made without the approval of the committee.
TRANSFER AND REGISTRY

Every corporation whose securities are listed upon the stock exchange must,,
in accordance with the rules of the exchange, maintain (a) a transfer office and
(6) a registry office, both in the Borough of Manhattan, city of New York.
The transfer agency and registrar shall not be identical, and both must be
acceptable to the committee. A company can not act as registrar of its own
stock.
Where a stock is transferred at the company’s office, the transfer agent or
transfer clerk shall be appointed by specific authority of the board of directors
to countersign certificates, in said capacity, and shall be other than an officer
who is authorized to sign certificates of stock.
The entire amount of the capital stock of a corporation listed upon the stock
exchange must be directly transferable at the transfer office of the corporation
in the Borough of Manhattan, city of New York. When a corporation makes,
transfer of its shares in other cities certifices shall be interchangeably trans

■84

STOCK EXCHANGE PRACTICES

ferable, and identical in color and form, except as to names of transfer agent
and registrar; and the combined amounts of stocks registered in all cities shall
not exceed the amount authorized to be listed.
Interchangeable certificates must bear a legend reciting the right of transfer
in New York and other cities.
The registrar must file with the secretary of the stock exchange an agree
ment to comply with the requirements in regard to registration and not to
register any listed stock or any increase thereof until authorized by the com
mittee.
Certifications of transfer and registry must be dated and signed by an au
thorized officer of the transfer agent and registrar, respectively.
A change in the form of a security of a transfer agency or of a registrar shall
.not be made without the approval of the committee.
FORMS OF CERTIFICATES, ENGRAVING, ETO.

General requirements

(See specific requirements below)
All securities for which listing upon the exchange is requested, except as
'•otherwise herein stated, must be engraved and printed in a manner satisfactory
to the committee from at least two steel plates by an engraving company whose
work the committee is authorized by the governing committee to pass upon;
the name of the engraving company must appear upon the face of all securities
and also upon the face of coupons and the title panel of each bond. Securities
must bear a vignette upon their face.
Said plates shall be: (1) A border and tint plate from which should be made
a printing in color underlying important portions of the face printing; (2) a
face plate containing the vignettes and descriptive or promissory portion of the
document, which should be printed in black or in black mixed with a color. The
combined effect of the impression from these plates must be as effectual security
as possible against counterfeiting.
The printing of securities must be in distinctive colors to make classes and
-denominations readily distinguishable.
All certificates, except as otherwise stated herein, must provide for transfer
and for registration with dates. When a corporation makes transfers of its
shares in other cities, certificates shall be identical in color and form, except as
to names of transfer agent and registrar; certificates interchangeably trans
ferable must bear a legend reciting the right of transfer in New York and
-other cities.
The committee recommends that the text of securities shall provide for trans
fer in person or by duly authorized attorney upon surrender of the security
properly indorsed.
A change in the form of a security, transfer agency, registrar, or trustee of
bonds shall not be made without the approval of the committee.
The committee will object to any security upon which an impress is made by
a hand stamp, except for a date or power of substitution.
Bonds
In addition to the general requirements above outlined the following apply
specifically to bonds:
All bonds must be fully engraved and printed in a manner satisfactory to the
•committee; face of bonds and coupons must bear a vignette.
The text of bonds should recite conditions of issuance, tax exemption, terms
of redemption (by sinking fund or otherwise), convertibility, default, inter
changeability or exchangeability of coupon and registered bonds, and conversion
into other securitiesi
Bonds, in the text and on the reverse, must recite payment of principal and
interest in the Borough of Manhattan, city of New York, and provide for trans
fer and registration. Coupons must recite payment of interest in the Borough
of Manhattan, city of New York, and tax exemption.
Registered bonds must carry a power of assignment in such form as the com
mittee may approve.
The committee recommends that registered bonds be made interchangeable
~with coupon bonds.

STOCK EX CH A N G E PRACTICES

Registered bonds interchangeable with coupon bonds shall bear a legend recit
ing numbers and denominations of coupon bonds against which they are issued.
If coupon bonds of any denomination are interchangeable with coupon bonds
of other denominations, they shall contain such recital in the text and bear an
appropriate legend on the reverse.
Registered bonds made such by detaching coupon sheets are not eligible for
listing.
Forms of legends for bonds
For coupon bonds of one denomination interchangeable with coupon bonds of
other denominations:
“As provided in the indenture, coupon bonds of the denominations of $1,000,
$500, or $100, at any time outstanding, when surrendered with all unmatured
coupons attached and upon the payment of charges, may be exchanged for an
equal aggregate principal amount of coupon bonds of any other denomination of
the same issue, of numbers not contemporaneously outstanding, with all un
matured coupons attached.”
For a coupon bond of a thousand dollars exchangeable for coupon bonds o f
smaller denominations:
“ The holder of this bond may, at his option, on surrender and cancellation
and on payment of charges, as provided in the indenture, receive in exchange
coupon bonds of this issue for an amount aggregating $1,000 in denominations
of $---------of numbers not contemporaneously outstanding.”
For coupon bonds of smaller denominations exchangeable for a $500 or a
$1,000 coupon bond:
“ The holder of this bond may, at his option, on surrender and cancellation of
this bond and others of the same issue aggregating $500 or $1,000, and on
payment of charges, as provided in the indenture, receive in exchange a coupon
bond of this issue of a number not contemporaneously outstanding for the
amount aggregated.”
For registered bond(s) issued for coupon bond(s) of denomination(s) of less
than $1,000:
“ This bond is issued in exchange for coupon bond(s) of this issue numbered
---------in denominations of $— ------- not contemporaneously outstanding, aggre
gating the face value hereof and coupon bond(s) of this issue bearing the said
number(s) and of the same denomination(s) will be issued in exchange for this
bond upon surrender, cancellation, and payment of charges provided in the
indenture.”
For registered bond(s) issued for $1,000 coupon bond(s) :
“ This bond is issued in exchange for coupon bond(s) of this issue numbered
--------- for $1,000 (each), not contemporaneously outstanding, and coupon
bond(s) of this issue bearing the said number (s) will be issued in exchange for
this bond upon surrender, cancellation, and payment of charges provided in the
indenture.”
Stock
In addition to the above general requirements, the following apply specifically
to stock certificates:
The border and tint plate for 100 share certificates of stock shall have said
denomination engraved thereon in words and figures; the plates for smaller
amounts shall bear some engraved device whereby the exact denomination of
the certificate may be distinctly designated by perforation; also conspicuously
upon the face, “ Certificate for less than 100 shares.”
Certificates of every class of stock shall recite the preference of all classes,
if required by the laws of the State of incorporation. If not so required, certifi
cates must contain at least a complete statement of the preference of the class
of stock represented thereby, and also a statement that other classes o f
stock are authorized and that a printed copy of the preference of all classes
of stock will be furnished to stockholders on request.
Certificates of stock shall recite (1) ownership; (2) per value; (3) whether
shares are full paid and (4) nonassessable; (5) preference as to dividends;
(6) distribution of assets upon dissolution or merger; (7) terms of redemption;
(8) convertibility; (9) voting power or (10) other privileges; and (11) must
bear the following legend:
This certificate is not valid until countersigned by the transfer agent, and
registered by the registrar.

STOCK EXCHANGE PRACTICES

The following form is required upon the reverse of a certificate of stock:
For value received_____ hereby sell, assign, and transfer u n to __________
_____ shares of the capital1 stock represented by the within certificate and do
liereby irrevocably constitute and appoint_____ attorney to transfer the said
stock on the books of the within-named company with full power of substitution
in the premises.
Dated-------- , 1 9 In presence of—
N o t ic e .— The signature to this assignment must correspond with the name
as written upon the face of the certificate in every particular without alteration
■or enlargement, or any change whatever.

Certificates of deposit, voting trust certificates, etc.
In addition to the general requirements above outlined, certificates of deposit
and voting trust certificates must conform in every particular to the specific
requirements as to stock certificates, except that the descriptive portion of a
certificate of deposit may be typed satisfactorily to the committee.
Temporary certificates or receipts
Temporary certificates or receipts must conform to the general requirements
above outlined and to the specific requirements as to stock certificates, except
that the text may be typed satisfactorily to the committee, and need not bear a
vignette.
REMOVALS OE SUSPENSIONS IN DEALINGS' OF LISTED SECURITIES

Whenever it shall appear that the outstanding amount of any security listed
upon the stock exchange has become so reduced as to make inadvisable further
dealings therein, the committee may direct that such security be removed from
the list and further dealings therein prohibited.
“ The governing committee may suspend dealings in the securities of any
corporation previously admitted to quotation upon the exchange, or it may sum
marily remove any securities from the list.”
F rank A ltsghul , Chairman.
A shbhl G reen, Secretary.
A ppendix A

Applications must be accompanied by the required papers and agreements and
hy a check to be drawn to the order of “ Treasurer, New York Stock Exchange,”
for a fee in accordance with the following schedule, such fee being computed
separately for each class of security included in an application. In addition to
such fees, companies making application are required to pay cost of printing.
Printer’s bills will be submitted directly to the applicant
BASIC FEES

The basic fee for listing stock or securities arising out of stock, such as cer
tificates of deposit for stock, interim certificates for stock, allotment certificates
for stock, voting trust certificates, etc., shall be, in the case of certificates having
either no par value or a par value of $100 or less, 1& cents per share, any
fraction of 10,000 shares, over and above a multiple thereof, to be counted as
10,000 shares for this purpose. The basic fee for listing bonds, debentures,
notes, and similar instruments having a face value and not being issued in
denominations of less than $100 shall be $120 per $1,000,000 face value or
fraction thereof.
In any case, where a fee is to be charged, whether at the basic rate or at a
modified rate, the minimum fee will be $120.
The full basic fee will be charged in all cases, unless otherwise herein stated.
1 On certificates without nominal or par value the word “ capital ” may be omitted.

STOCK EXCHANGE PRACTICES

MODIFICATIONS OF BASIC FEES

1. In cases where, after an initial listing, a change is involved between par
and no par in either direction, or is in the amount of the par value of the secu
rity, or represents a greater or smaller number of shares of no-par stock
involving the cessation of trading in no-par stock theretofore listed (as distin
guished from a stock dividend in which the old stock continues to be traded in),
the fee for such number of the substituted shares to be listed as is not in
excess of the number of shares to be stricken from the list shall be one-fourth
of the basic fee. For all shares so issued in excess of the number of shares
to be stricken from the list, the full basic fee will be charged.
2. Where there is a change in the classification or name of a stock, without
alteration of any preferences which it may bear, such as from capital to com
mon, or vice versa, and without alteration in the number of shares, one-fourth
■of the basic fee will be charged. When, however, the change of name of a
stock having a preference involves also the giving of a higher or lower prefer
ence to the stock, the full basic fee will be charged.
3. Where the change is in the nature of an extension of a time limit, as in
the case of an extended voting trust, the number of shares listed not being
increased, one-fourth of the basic fee will be charged.
4. Where the change is from listed stocks or bonds to certificates of deposit,
whether or not a reorganization of the listed company is involved, one-fourth
of the basic fee will be charged.
5. When the change is from certificates of deposit to stock or bonds:
(a.) If such stock or bonds are identical with formerly listed securities, for
which such certificates of deposit were issued, no fee will be charged up to the
number of shares so formerly listed. For additional shares, the full basic fee
will be charged.
( &) Where the certificates of deposit have been listed first and are thereafter
replaced by the securities initially deposited, one-fourth of the basic fee will
be charged for listing such securities.
(c)
If such stock or bonds represent securities issued under a reorganiza
tion, or in any other respect differ from the securities for which such certifi
cates of deposit were originally issued, the full basic fee will be charged,
whether or not the securities were listed for which the certificates of deposit
were originally issued.
6. Where voting trust or stock trust certificates are issued in exchange for
listed stock of the same company, one-fourth of the basic fee will be charged.
7. When voting trusts or stock trusts terminate and where the stock replacing
them is identical with formerly listed stock for which such voting or stock
trust certificates were issued, there will be no fee up to the number of shares
so formerly listed. For additional shares, the full basic fee will be charged.
If, however, the stock replacing such certificates was not formerly listed, onefourth the basic fee will be charged.
8. Where the name of a corporation is changed, without reorganization, merger,
or other change in its corporate structure, the fee will be one-fourth of the
basic fee for such number of shares as may be issued not in excess of the
number of each class authorized to be listed prior to such change of name,
plus the full basic fee for any additional number of shares. If, however, a
reorganization or merger resulting in a new corporation is involved, the full
basic fee will be charged on all shares to be listed.
9. In the case of a stock dividend, the additional stock issued is subject to the
full basic fee. There is no additional fee as to the old stock.
MEMO. FOB------------- COMPANY

Preliminary: four drafts of application; one copy, charters, by-laws, mort
gages, etc.; one distribution; set of specimens.
The following papers, etc., are required to complete the files:
Check for $______and letter of transmittal to accompany application.
1. Application, original signed copy (and 14 copies).
Application, sign proof.
Application, final signed copy.
2. Charter, with amendments (certified by secretary of State), (and 3
copies).
3. By-laws, with amendments (certified) ; (and 3 copies).
4. Leases (locations).

STOCK EXCHANGE PEACTICES

5. Special agreements.
6. Resolutions:
(а) Authorizing issues—stockholders.
(б) Authorizing issues—directors.
(c) Authorizing reservation for conversion.
(d) Authorizing listing—appearance o f __________
( e ) Appointing transfer agents and registrars.
7. Registrar’s certificates as to amount registered.
8. Opinion of counsel.
9. Distribution (and seven copies), all signed.
9a. Notice from transfer agent as to amount issued.
10. Public authority certificate.
11. Report of engineer (or equivalent).
12. Map.
13. Specimens (temporary) approved__________
14. Specimens (permanent) approved)__ ___;____
15. Specimens (altered) approved__________
16. Mortgage or indenture (and supplements) (certified) (and three copies).
17. Trustee’s certificate, showing: (a) acceptance of trust; (6) securities areissued in accordance with indenture; (c) disposition of securities redeemed or
refunded; (d) collateral deposited; (e) disposition of prior obligations.
18. Certified copy of release or satisfactions of underlying mortgages.
19. Financial statements (certified).
20. Questionnaire.
21. Notice of availability of eligible security for trading (issue, transfers, and
exchanges).
Notice from company as to amount taken by underwriters.
22. Agreements.
Certificates of deposit, voting trust, etc.: Certified copy deposit or trust
agreement; certified copy circular issued by trustees or committee; certificate as
to amount deposited.
Reorganizations: Certified copy decree of foreclosure or dissolution; certified
copy decree confirming sale; certified copy of court, authority for reorganiza
tion ; certified copy of plan.
____________

(C o m p a n y ).

D ate,__________
Distribution o f ___________________ bonds o n ---------------- , 192— :
No. of holders.

_________
_________
_________
_________
_________
_________
_________

Amount

Holding up to $5,000_____________________________
Holding up to $5,001 to $10,000------------------------------Holding up to $10,001 to $20,000---------------------------Holding up to $20,001 to $30,000__________________
Holding up to $30,001 to $40,000__________________
Holding up to $40,001 to $50,000__________________
Holding over $50,000---------------------------------------------

$________
$-----------$________
$________
$________
$________
$------------

________
Total number of holders______________________ $________
(To be made out for each class of bonds applied for.)
_________ Company,
Distribution o f ___________________ stock o n __________ , 193__:
Shares

-----------________
________
________
________
________
------------

Holders
Holders
Holders
Holders
Holders
Holders
Holders

of 1 to 100 share lots--------------------------------of 101 to 200 share lots____________________
of 201 to 300 share lots____________________
of 301 to 400 share lots____________________
of 401 to 500 share lots____________________
of 500 to 1,000 share lots-----------------------------of 11,001 and up share lots_________________

Total stockholders.
1
2
3
4

-----------________
________
________
________
-----------________

Total shares

1 The 10 highest holders on the above date were as follows:
.
shares.
5 . __________ shares.
9 . __________ shares.
.
shares.
6 . ---------------- shares.
1 0 .___________shares.
.
shares.
7 . ---------------- shares.
Total____shares.
. ----------- shares.
8 . ---------------- shares.

STOCK EXCHANGE PRACTICES

a ii stock is free for sale and is held under no syndicate, agreement, or
•control.
Certified correct.
(To be made out for each class of stock applied for.)

A greem en ts

To be made part of applications where applicable
T h e ____________________ _ in consideration of the listing of the securities
covered by this application, agrees with the New York Stock Exchange as
follows:
1. To notify the New York Stock Exchange promptly of any change in the
general character or nature of its business.
2. To notify the New York Stock Exchange immediately if it or any sub
sidiary or controlled company should dispose of any property or of any stock
interest in any of its subsidiary or controlled companies, with statement of
the consideration received when such disposal would impair or materially affect
its financial position or the nature or extent of its operations as theretofore
conducted.
3. To publish periodical statements of earnings, as agreed upon with the
committee.
4. To publish at least once in each year and submit to stockholders at least
15 days in advance of the annual meeting of the corporation a balance sheet
and income statement for the last fiscal year and a surplus statement of the
applicant company as a separate corporate entity and of each corporation in
which it holds, directly or indirectly, a majority of the equity stock, or, in lieu
thereof, eliminating all intercompany transactions.
A similar set of consolidated financial statements. If any such consolidated
statements exclude any companies a majority of whose equity stock is owned,
(a) the caption will indicate the degree of consolidation; (6) the income
account will reflect, either in a footnote or otherwise, the parent company’s
proportion of the sum of or difference between current earnings or losses and
the dividends of such unconsolidated subsidiaries for the period of the report;
and (c) the balance sheet will reflect, in a footnote or otherwise, the extent
to which the equity of the parent company in such subsidiaries has been
increased or diminished since the date of acquisition as a result of profits,
losses, and distributions. Appropriate reserves, in accordance with giood
accounting practice, will be made against profits arising out of all transactions
with unconsolidated subsidiaries in either parent company statements or con
solidated statements.
Such statements will reflect the existence of any default in interest, cumu
lative dividend requirements, sinking fund, or redemption fund requirements
of any controlled corporation, whether consolidated or unconsolidated.
5. To publish all future annual financial statements of any character, in the
form contained in the listing application and in the publication of reports of
earnings for any period of less than a fiscal year to show net profits in the
aggregate and per share of each class of listed stock after depreciation, deple
tion, income taxes, and interest, estimating the proportionate amount of these
items as accurately as may be if not finally determined at date of publication.
6. Not itself and not to permit any subsidiary, directly or indirectly con
trolled, to take up as income stock dividends received at an amount greater than
that charged against earnings, earned surplus, or both of them by the issuing
company in relation thereto.
7. Not to make any change in depreciation policies as described in the appli
cation and not to make any substantial change in any percentages therein
recited as applicable to particular classes of property without notifying the
stock exchange and without calling attention to such changes in the next
succeeding published report and, if this be an interim report, also in the next
succeeding annual report.
8. To maintain, in accordance with the rules of the stock exchange, a transfer
office or agency in the Borough of Manhattan, city of New York, where all
listed securities shall be directly transferable, and the principal of all listed
securities with interest or dividends thereon shall be payable: also a registry
office in the Borough of Manhattan, city of New York, south of Chambers Street,
other than its transfer office or agency in said city, where all listed securities
shall be registered. If its transfer books should be permanently closed, to con
tinue to split up certificates of listed stock into smaller denominations in the

STOCK EXCHANGE PRACTICES

same name so long as such stock shall be retained upon its list by the New York
Stock Exchange. If its transfer office or agency should be or should become
located north of Chambers Street, to arrange, at its own cost and expense, that
its registry office will receive and redeliver all securities deposited at such
registry office for the purpose of transfer.
9. Not to add to the number of its transfer agencies nor to make any change
of a transfer agency, or of a trustee of its listed bonds or securities, without
prior notice to the committee on stock list, and not to add to the number of
registrars of its listed stock nor to change a registrar of its listed stock without
the prior approval of the committee on stock list, nor to select an officer or
director of the company as a trustee of its mortgages or other listed securities
unless such officer or director be a cotrustee for an issue haying a corporate
trustee.
10. Not to make any change in the form or nature of its listed securities or
in the rights or privileges of the holders thereof, without haying giyen 20 days’
prior notice to the committee on stock list of such proposed changes, and haying
made application for the listing of the securities as changed, if the committee
on stock list so requires.
11. To notify the stock exchange in the event of the issuance or creation in
any form or manner of any rights to subscribe to, or to be allotted, its securities,
or of any other rights or benefits pertaining to ownership in its securities, and
to afford the holders of its listed securities a proper period within which to
record their interests and to exercise their rights, and to issue all such rights
in form approved by the stock exchange and to make the same transferable,
payable, and deliverable in the Borough of Manhattan, city of New York.
12. To notify the stock exchange promptly in the event of issuance of options
or warrants to purchase stock, otherwise than
(а) pro rata to stockholders,
(б) to officers and employees under general employee’s stock purchase plan,
(c) firm offers of stock to be taken in a block within four months from the
date of such offer, of the number of shares covered by such options, of their
terms and of the time within which they may be exercised and of any subse
quent changes therein and thereafter to include this information together
with like information as to any options in existence at the time of approval
of this application so long as said options are outstanding, in all annual financial
reports furnished to stockholders and in all formal published reports.
13. To make application to the stock exchange for the listing of additional
amounts of listed securities sufficiently prior to the issuance thereof to permit
action in due course upon such application.
14. To publish promptly to holders of listed stock any action in respect to
dividends on shares, or allotments of rights for subscription to securities,
notices thereof to be sent to the stock exchange, and to give to the stock ex
change at least 10 days’ notice in advance of the closing of the transfer books,
or extensions, or of the taking of a record of holders for any purpose.
15. To forward to the stock exchange copies of all notices mailed to stock
holders looking toward charter amendments, and to file with the stock ex
change two copies of amended charter, or resolutions of directors in the nature
of amendments (one of which must be certified) as soon as such amendments
or resolutions have become effective.
16. Not to purchase listed preferred stock for retirement at a price in excess
of that at which the stock purchased might then be obtained in the open market
and not to select preferred stock for redemption otherwise than pro rata or by
lo t; to notify the stock exchange immediately and at least 15 days in advance
of any sueh redemptions, and to furnish to the stock exchange any informa
tion requested in reference to such redemption.
17. To notify the stock exchange of the change or removal, to a substantial
extent, of collateral, deposited under any of its mortgage or trust indentures
under which listed securities are outstanding.
18. To have on hand at all times a sufficient supply of certificates to meet
the demands for transfer.
19. If at any time the stock certificates of the company do not recite the
preferences of all classes of stock the company agrees with the exchange that
it will furnish stockholders, upon request and without charge with a printed copy
of the preferences of all classes of stock.
20. To furnish the New York Stock Exchange, on demand, such reasonable
information concerning the company as may be required.

STOCK EXCHANGE PRACTICES

Q u e s t i o n n a ir e !

(To be signed by an officer of the company)
__________ _ 193—
This questionnaire accompanies application of th e ------------------------------- for
the listing o f _____________________
1. Is the management control of the company held by any other company
through either stock ownership, lease, or contract? --------2. Are there within your knowledge any syndicate or concentrated holdingsof this security? --------Is there any restraint on any portion of the security? --------4. What dividends (if any) are in arrears on the preferred stocks either of
the company o rof any of its subsidiaries? --------5. What dividends (if any) have been declared (and not paid) since the
date of this application? --------6. What rights (if any) to subscribe to any present securities or new securi
ties remain unsettled as of the date of this application? --------7. Are the transfer books to be closed or a record of stockholders to be taken
in the near future for any purpose? --------8. Has there been any change in your charter or by-laws since previous filing
with the committee? --------9. W ill you agree to publish quarterly statements of earnings and transmit
copies of such statements to the committee on stock list? --------10. If it is legal under your charter, will you agree to take a record o f
stockholders for dividends and meetings instead of closing your b o o k s?---------11. To avoid the congestion caused by the fact that numerous corporations
have adopted the same date of record of stockholders for payment of dividends,,
will you agree to make your record date of stockholders for such purpose some
date other than the 15th of March, June, September, and December? --------12. In case the securities to be listed are in temporary form will you agree
that orders for permanent engraved securities to replace them shall be placed
within 30 days and that, when ready for delivery, a notice will be sent to
stockholders asking that temporary certificates be exchanged immediately for
permanents and calling attention to the fact that it is the practice of the New
York Stock Exchange to strike temporaries from the list 10 days after the
admission of permanents? --------13. When and by whom was the last audit of your books prepared? ______
14. W ill you make copies of the audits of your books available to the com
mittee on request? ______
15. Have any other reports of a financial, accounting, or engineering nature
been made either on your behalf or on behalf of any banker or underwriting
or banking group within the past three years? ______ If so, please indicate
the character of these reports and state whether they will be made available
for the inspection of this committee upon request? ______
16. Is there any litigation pending or threatened that would affect the com
pany’s income from, title to, or possession of any of its property? ______
17. The committee in order to facilitate the business of the exchange desires
that the transfer agent of your company be directed to sign the stock transfer
department receipts for all stock submitted by the Stock Clearing Corporation
for transfer. W ill you so agree? _______
18. W ill you agree to issue new certificates replacing lost ones forthwith upon
notification of loss and receipt of proper indemnity, making any changes which
may be necessary in your charter or by-laws to permit this to be done? ______
19. Will you agree that all calls for redemption (foreign bonds) published
abroad will be published on the same day or days in a newspaper of general
circulation published in the Borough of Manhattan, city of New York? _______
20. The committee desires to be kept informed as to any diminution in the
supply of stock available for the market occasioned by deposit of stock under
voting trust agreements or other deposit agreements. If knowledge of any
such actual or proposed deposits should come to the official knowledge of the
officers or directors of the company, will you agree promptly to notify the ex
change, giving the names and addresses of the deposit committee and, if known
to the company, the amount or number of shares so deposited? ______
21. If action on your application is favorable how many copies of the appli
cation do you require printed for you at your expense? ______
22. In the event any additional papers should be required for the committee’s
files, will you agree to furnish same on request? ______ ____________________

B y -------------------- 1

STOCK EXCHANGE PEACTICES

1. “ The financial statements included in this application were audited by
--------- , whose certification attached thereto is in the following form: (quote
certification).”
Any necessary modifications of this may be made to fit the circumstances
as, for instance, if there is no certification, and the exhibits are simply signed
by the accountant, the paragraph should show that the statements have been
signed without qualification. If annual statements have been audited but
interim statements have not been, the paragraph should show this and should
show the name of the officer of the company certifying the interim statements.
If the financial statements in the exhibits have been, audited by another auditor,
the foregoing paragraph should be confined to the statements in the main body
of the application and each exhibit should contain a similar paragraph as to
the financial statements included therein.
Under the same heading as the foregoing paragraph and in cases where an
outside accountant is employed, there should be a statement to the effect either
that there has been no change in accountants during the past 12 months or
that there has been a change in accountants, giving the date of such change.
This paragraph is not necessary where the accounts are certified only by the
officers of the company.
2. In case an engineer’s appraisal, or certificate, is filed with the applica
tion, an appropriate paragraph should appear under the heading, “ Engineer’s
report,” stating the nature of the supporting papers filed and the nante of
the engineer.
3. Application should contain a paragraph headed, “ Opinion of counsel,”
and reciting that the validity of the securities to be issued has been passed
upon and approved by (naming counsel). In case counsel’s opinion, as fur
nished, contains other matter of importance, due reference thereto should be
made in this paragraph.
S p e c ia l R e q u ir e m e n t s f o r L is t in g I n v e s t m e n t T r u s t S e c u r it ie s , N e w T o r s
Sto ck E xc h a n g e

(Approved by committee on stock list, June 6, 1929, as amended to April, 1931)
The committee on stock list is prepared to receive applications to list the
securities of certain types of companies commonly designated as investment
trusts and to consider each application on its merits.
The committee regards as falling within this designation such companies as
are engaged primarily in the business of investing and reinvesting in the
securities of other corporations for the purpose of revenue and for profit, and
not in general for the purpose of exercising control.
As companies of this nature represent a relatively recent development in
American finance, the committee designs, in promulgating these requirements,
merely to give to prospective applicants information as to the policies wh’ch
will guide it in the light of its present knowledge. As experience with con
ditions gained through actual applications progresses, the right is reserved to
alter or amend these requirements, in the discretion of the committee, without
notice.
For the present, applications for listing securities of investment trusts will be
considered only when such trusts are of the general or management type.
In order that securities falling within this category may be eligible for listing,
an application must be filed with the committee on stock list in the manner
prescribed in a circular of the committee dated January 2, 1931 (or any
future amendments thereof), and contain the information and be accompanied
by the required documents, in so far as the provisions of that circular are
applicable.
NONPUBLICATTON OF APPLICATIONS

Until further notice the names of investment trusts which apply for listing of
their securities shall not be published, inasmuch as refusals may be frequent
until satisfactory final requirements for listing shall have been developed
through experience. At a later date the usual publicity may be given to the
names of applicants.
MANAGEMENT

Each application for listing a security of an investment trust, as defined
above, must state whether such trust is to be managed independently by its
own officers and directors or whether it is to be managed directly or indirectly

STOCK EXCHANGE PRACTICES

by other individuals, firms, or corporations. The names of all individuals,
firms, or corporations which are directly or indirectly responsible for the man
agement must be set forth, and there must be included in the body of the appli
cation a summary of all significant provisions contained in the charter, articles
of incorporation, and by-laws of the company, and all significant provisions
contained in any existing agreements or contracts which define the powers and
privileges of the management and the restraints thereon.
Copies of all of these documents must be submitted with the application.
These requirements apply likewise to any subsidiaries existing at the time
of the application.
If the investment trust is managed exclusively and independently by its own
officers and directors, the affiliations of such officers and directors with other
firms or corporations must be stated.
If the investment trust is managed directly or indirectly by another indi
vidual, firm, or corporation, a copy of each contract with such individual,
firm, or corporation must be included in the body of the application.
Each application must present full details regarding the basis on which com
pensation for management is computed, including direct payments, options,
warrants, and any other forin of direct or indirect compensation either present
or future.
Applicant companies must agree promptly to advise the exchange, on behalf
of themselves and of any subsidiaries which have been or may be formed, of
any change in the terms or conditions of any management contracts existing
at the time of listing and of the terms and conditions of contracts subsequently
concluded. In like manner applicant companies and subsidiaries must agree
to inform the exchange of all changes in terms and conditions of option
warrants.
OPERATING EXPERIENCE

No fixed period of actual existence as an operating investment trust is now
stipulated before the applicant is eligible for listing, but such reasonable period
will be required as in the judgment of the eolmmittee has demonstrated that
the applicant is a successful operating organization. The required period may
be made to depend upon the organization’s size and the purpose of the trust.
SIZE

In order to be eligible for listing the aggregate value of the capital, surplus
and funded debt of an investment trust, whether managed independently and
directly by its own officers and directors or managed directly or indirectly by
other individuals, firms, or corporations, should be of such minimuftn size as
will, in the opinion of the committee, permit successful operation as an invest
ment trust. Such required aggregate of capital, surplus, and funded indebted
ness will depend upon the organization and purposes of the trust and other
general considerations.
ORGANIZATION EXPENSES

Each application must show in detail all costs of organization and all expenses
of selling each class of securities of such trust which may have been issued,
together with a precise statement of the net proceeds to the company of each
issue of its securities. Excessive costs of organization and of selling title
several classes of securities of an investment trust may be considered as a bar
to listing, unless such excessive costs have been absorbed prior to the date of
the application.
loans

If the application indicates that the company has an excessive amount of
unfunded debt, or if subsequent reports indicate that such unfunded debt
exceeds or tends to exceed prudent limits, the application may be rejected or the
securities of the investment trust in question may be stricken from the list, as
the case may be.
COMMISSIONS

As a prerequisite for listing, each individual, firm, or corporation which is
directly or indirectly concerned with the management of an investment trust
and collectively constituting the managers of the trust must agree either with
the New Tork Stock Exchange or in the management contracts with the invest*
119852—38— APP.------- 7

STOCK EXCHANGE PRACTICES

ment trust that on any securities listed on any recognized stock exchange only
the commissions authorized by such exchange shall be charged by such managers
on securities bought or sold by such managers for the account of the investment
trust and that only customary and reasonable commissions shall be charged by
them on unlisted securities which shall be purchased or sold.
NONVOTING STOCK

In case an investment trust has issued one or more classes of stock which are
entitled to preferential dividends but which do not carry the right to vote, such
stock shall be accorded the right to vote at all times that as much as one year’s
preferential dividends are in arrears, and the right to vote shall continue until
arrears have been liquidated. No nonvoting stocks will be listed unless sub
stantially preferred as to both dividends and assets.
s t a t e m e n t of e a r n in g s a n d

subflus

A comprehensive and detailed statement of earnings and of surplus shall be
prepared and published within 30 days after the close of at least each annual
fiscal period. Such statement shall also be submitted to stockholders at least
IS days in advance of the annual meeting of the investment trust. The state
ment shall show separately gross earnings, if any, under at least the following
classifications:
Interest; dividends; profit on sale of securities (if taken into income ac
count) ; profit in syndicate participations; transfers from reserves previously
created, if any; and miscellaneous.
Only actual realized earnings shall be shown in the income account or shall
be reflected in the balance-sheet figures.
In case the item “ Miscellaneous earnings” appears to the committee to re
quire explanation, such item must be further classified as to origin.
The committee favors the elimination from the income account of all profits
or losses on security transactions and crediting or debiting them, preferably
to. a properly designated reserve, or else to a special surplus account, which
should be a segregated part of the earned surplus. Should a reserve be estab
lished and a debit balance occur therein, it should be shown as a deduction from
earned surplus. This reserve or special surplus account should not be regarded
as available for current dividends, and when utilized as a source of special
dividends, such dividends should carry with them a clear indication of their
character.
Excepting the elimination of realized gains or losses on the sale of securi
ties, the income account shall include all revenue, as well as all losses, from
whatever source derived. Either the income account or entries to reserve or
special surplus account shall reflect, in the aggregate, the profit or loss upon
each and every completed transaction consummated by the purchase and sale
of securities. A technical short sale against a long position must not be used
for the purpose of considering any transaction as incomplete.
In cases where profit on sale of securities is treated as a part of the income,
losses on sale of securities "must be treated as part of the deduction from
income. If reserves have been established against such losses, the full realized
losses should first be included in the income account, and any utilization of
such reserves should be treated thereafter as a transfer from reserves to the
credit of income account.
In computing realized profits or losses on the sale of securities, the method
of computing the cost of securities sold upon the basis of their average cost
appears to be the only one which does not result in a distortion of the income
account. The method of computing costs of securities sold must be described
in all financial statements presented and attention called to any changes what
soever in accounting methods within the period.
Any profit arising out of the reacquisition of a company’s own preferred or
common stock at less than its par or stated value, or arising out of^the resale
of such reacquired stock at a price higher than’ that at which it was reacquired,
must be shown as an item of capital or of capital surplus, and in no case as a
part of earnings or of earned surplus.
Profits arising out of the reacquisition of its own bonds by a company may be
used to diminish any unamortized bond discount and expense, credited to earned
surplus direct and not through income account, or credited direct to capital
surplus, at the option of the company.

STOCK EXCHANGE PRACTICES

The income account shall include no profits resulting from participation in a
syndicate offering securities to the public until such syndicate is closed. If the
applicant enters into any other operations in account with others, the profit or
loss at the date of each published financial statement must be reflected therein.
As a footnote to the income account there should be a clear statement of the
increase or decrease during the current year of the amount by which the market
value of securities held exceeds or is less than their book value.
In the case of investment trusts which eliminate from the income account
realized trading gains and losses, there should be a further footnote showing
any change which has taken place in the reserve or special surplus account
through which these trading gains or losses are booked.
If reserves against possible losses are set aside out of profits, the income
account must show the amount so appropriated during the current accounting
period, and the accrued reserves to date against losses shall also be shown in the
balance sheet.
Expenses and deductions must be reported in such reasonable detail as the
committee may determine, including showing separately, at least, interest paid
and accrued, taxes paid and accrued, transfers to reserves, if any.
The statement of surplus shall show the amount carried forward as surplus
from the immediately preceding period and indicate in detail all additions
thereto and deductions therefrom.
BALANCE! SHEET

A comprehensive and detailed balance sheet shall be prepared and published
within 30 days after the close of each year. Such balance sheet shall also be
submitted to stockholders at least 15 days in advance of the annual meeting of
the investment trust.
The valuation of securities held must be shown upon the balance sheet at cost,
summarized in reasonable detail. There must be a clear distinction made be
tween capital surplus and earned surplus. If reserves have been created, the
designation of these reserves must be so clear that there can be no doubt of
their nature and purpose. There must be appended to each balance sheet a
footnote showing the aggregate cost of all securities owned, their aggregate
current value, and the difference. If a reserve has been set up against all or
any part of any unrealized losses, proper reference to this reserve should be
made in the footnote.
ANALYTICAL. STATEMENTS

There should be included in the report an analysis of the change in position
during the period, showing the net improvement or impairment in position for
the period, including unrealized gains and losses, such change to be shown after
dividends and without taking into account capital transactions. The net im
provement or impairment in question should be shown in the aggregate, and per
share for each class of stock outstanding.
The actual dividend per share paid on each class of stock outstanding should
be shown in connection with this analysis.
There should appear in the report an analysis of the cover in back of all
capital obligations; for the purpose of this analysis, the portfolio should be
adjusted to the market value, including in this adjustment the portfolio of any
unconsolidated and subsidiary investment trust as though it had been fully
consolidated. This should show as of the beginning and end of the period under
review the following items, together with such changes in them as have taken
place: (1) Assets behind outstanding bonds; (2) assets behind outstanding
preferred stocks; (3) assets behind outstanding common stock, in each case
expressed in dollars per unit of the security in question.
While this analysis may be shown in any suitable manner, the committee is
prepared to furnish forms which it regards as appropriate.
INVESTMENTS

The applicant shall publish with the annual report a statement showing the
value of securities held either directly or indirectly at the close of each period
covered by the report. Valuation of securities for this statement shall be based
upon market price of all securities listed on recognized stock exchanges and
upon fair appraisal of other securities. There must be contained in the report a
complete list of all of the holdings of the company showing names and quanti

STOCK EXCHANGE PRACTICES

ties with the proviso that no more than an amount of 10 per cent of the com
pany’s aggregate capital and surplus or 10 per cent of the cost of securities
held, whichever may be less, may be covered under a heading “ Miscellaneous
securities ” : Provided, That after the first annual report following listing such
securities have not been held for more than one year: And providing further,
That no security which at any preceding time has been reported by name may
thereafter be transferred and included under the heading, “ Miscellaneous
securities.” This list should disclose the aggregate cost of the securities and
their aggregate market value and in the case of holdings not listed on the New
York Stock Exchange or the New York Curb Market, the price at which each
such holding has been inventoried for the purpose of determining aggregate
market value must be clearly set forth with such supporting information as may
seem desirable.
a u d it o r s ’

c e r t if ic a t e

There must be appended to all financial statements and inventories required
by the committee the certificate of a public accountant qualified under the laws
of some State or country, which shall cover all financial and analytical state
ments submitted. This certificate shall contain a statement that no one of the
items carried under the term “ Miscellaneous ” in the list of investments, sub
sequent to the initial application, has been held for more than one year.
P U R C H A S E OF O W N C O M M O N STOCK

The applicant shall not purchase or otherwise acquire for its own account, or
indirectly through a subsidiary, shares of its common stock, however designated,
otherwise than under exceptional and special circumstances. In case any such
purchase is made, the applicant shall publish in its annual report the number
of shares purchased and the price paid for such shares. In case the applicant
purchases any of its own common stock, it shall submit promptly to the commit
tee on stock list all relevant facts in connection therewith, and upon request of
the committee it shall take such steps as the committee deems necessary to make
such reacquired shares unavailable for trading without further application.
Permission to dispose of such reacquired shares will be granted only on condi
tion that the sale price of such shares shall be fully shown in the annual report.
s u b s id ia r ie s

In case the investment trust holds, either directly or indirectly, a majority
interest in the voting stock of another company at the time of any earnings
report, such other company shall be considered as a subsidiary. Each balance
sheet and earnings statement shall be presented in one of the following forms:
1. A fully consolidated balance sheet and earnings statement, prepared in
such manner as to include each subsidiary, as defined above, and also to show
any minority equities in both earnings and assets. Securities owned by each
subsidiary shall be presented separately, as indicated under the requirement
entitled “ Investments.”
2. Separate earnings statements and balance sheets for each subsidiary, to
gether with a separate tabulation of securities of such subsidiary, in accordance
with the requirements entitled “ Balance sheet ” and “ Investments.” In case
this alternative is adopted, the valuation assigned upon applicant’s balance
sheet to its equity in such subsidiary or subsidiaries must be shown separately
and must not be greater than the cost thereof. There must also be separate
footnotes to parent company’s balance sheet and income account giving effect
to market or appraisal value of the investments of subsidiaries.
SP E C IA L AG REEM EN TS

Applicants must agree not to pay any cash or stock dividends on common
stock when such dividends, plus any amount by which the current value of
securities held shall be less than their cosT, exceed the earned surplus and undi
vided profits, unless at the time of the payment of such dividends there is sent
to stockholders a statement, in form approved by the committee on stock list,
setting forth clearly the net impairment which will exist after the payment of
such dividends, stated both in aggregate dollars and dollars per share of com
mon stock. If the corporation has senior securities outstanding at the time
of the payment of any such dividends, such statement must, in addition, state

STOCK EXCHANGE PRACTICES

in terms of percentage the ratio of the common stock equity, remaining after
the declaration of such dividends, to such senior securities, taken at par value
or the sum to which they would be entitled upon involuntary liquidation, which
ever is the greater. For the purpose of this agreement stock dividends must be
charged against earnings on what appears to the committee on stock list to be a
reasonable basis.
This agreement must further provide that no dividends will be paid upon
common stock unless net earnings excluding net realized trading losses, are at
least sufficient to cover them.
Statem en t

I n v e s t m e n t T r u s t s (M a n a g e m e n t T y p e ) , C o m m it t e e
L ist , N e w Y ork S to ck E x ch a n g e

Stock

The committee on stock list issued on June 6, 1929, its original tentative
requirements for the listing of investment-trust securities of the general or
management type on the New York Stock Exchange. Since then the com
mittee has had before it listing applications for 20 investment trusts and has
examined and compared a large number of investment-trust annual reports.
Beyond this, the committee has had discussions from time to time with invest
ment-trust managers and accountants with a view to keeping itself informed
concerning developments in investment-trust practice.
As a result of its efforts the committee feels that it is now in a position to
revise the tentative special requirements for listing investment-trust securities.
These requirements have been so revised, and the new requirements are avail
able for distribution.
In this connection it is felt that the time is opportune for the committee
to make some general observations in regard to the information that should
properly be included in the annual or semiannual reports of investment trusts,
in regard to the accounting methods upon which this information should be
based, and in regard to certain phases of investment-trust practice.
To the extent that these observations are positive in their nature, they
have, in general, been incorporated in the Listing Requirements. To the
extent that they are somewhat more tentative, they are submitted merely as
an expression of the existing preferences of the committee.
For the sake of clarity, these observations will be dealt with under the three
general headings “Annual reports,” “Accounting methods,” and “ Practice.”
ANNUAL REPORTS

The information the inclusion of which is considered essential is as follows:
(1) A list of officers and directors.
(2) A list of security holdings.
(3) A clear statement of the financial position of the company as of the date
of the report.
(4) A clear statement of the progress of the company during the period
covered by the report.
(5) An accountant’s certificate, so worded as to clearly include at least a
verification of the securities and an audit of all financial statements and
analyses presented.
Items (1) and (5) appear to require no particular comment.
Item (2) requires merely the explanation that, while a complete list of
security holdings seems desirable, the committee on stock list has recognized,
in its listing requirements for investment trusts, and still recognizes, that the
publication of a complete list may, under certain circumstances, involve a hard
ship on management which should be avoided. On this account, in order that
management may have reasonable leeway, the list.ng requirements provide that
there must be contained in the report a complete list of all the holdings of the
company, showing the names and quantities, with the proviso that no more than
an amount of 10 per cent of the company’s aggregate capital and surplus, or
10 per cent of the cost of securities held, whichever may be less, may be covered
under the heading “ Miscellaneous securities,” provided that after the first
annual report following listing such securities have not been held for more than
one year; and provided further, that no securities which at any preceding time
have been reported by name may thereafter be transferred and included under
the heading of “ Miscellaneous securities.”

STOCK EXCHANGE PRACTICES

Item (3) refers to the balance sheet included in investment-trust reports.
In the balance sheet securities held should be carried at cost and summarized
in reasonable detail, and that there should be a clear distinction made between
capital surplus and earned surplus, and that if reserves have been created,
the designation of these reserves in the balance sheet should be so clear that
there can be no doubt of their nature and purpose.
As a footnote to the balance sheet there should appear a statement setting
forth the terms of any outstanding option warrants and a statement indicating
the extent to which the cost of securities held was in excess of or was less than
their market value. In the event that a reserve has been set up in the balance
sheet against all or any part of the unrealized losses, appropriate reference to
this reserve should be included in the footnote.
Item (4) refers to the income account, the analysis of surplus, the analysis
of reserves, and the fluctuation in net unrealized profit or loss during the period
under review.
It is of prime importance for holders of investment-trust securities to be
able to determine readily just what progress their company has made during
a given period. In order that they may be able to do this it is necessary
for them to be in a position to consider in connection with the income account
the degree to which net unrealized profits or losses have changed since the
prior accounting period.
In order to assist investors in this respect there should be added as a foot
note to the income account a statement showing the change that has taken
place during the period under review in the net unrealized appreciation or
depreciation in the portfolio. The income account, capable of determination
in various ways, and discussed more fully under the heading “Accounting
methods,” may prove, under any method, to be utterly misleading unless it is
considered in conjunction with this information.
In order that this information, when presented, may be readily and correctly
interpreted by investors the inclusion of certain amplified statements is
highly desirable. One of these statements should analyze the cover behind
the company’s capital obligations, and the other should analyze such changes
as have taken place in the position of the company during the period under
review.
The committee will be glad to discuss with executives forms of statement
which seem to meet the particular situation of individual companies and which
at the same time conform to the general view of the committee.
The inclusion of the above information in investment-trust reports is abso
lutely essential if the public interest is to be safeguarded.
ACCOUNTING METHODS

Whatever the form adopted may be, it is manifest that reports will be no
better than the accounting methods on which they are based. There seems
little occasion to comment further in regard to the balance sheet, but account
ing practice having to do with income account and surplus account varies to
such an extent as to suggest the desirability of some amplification of our
views on this subject.
While recognizing that corporations have a right of choice in this respect,
the committee is strongly in favor of eliminating from the income account all
profits or losses on security transactions and of crediting or debiting them
direct, preferably to a properly designated reserve account, or else to a special
surplus account, which should be a segregated part of the earned surplus.
Such gains and losses are more closely related to the unrealized appreciation
or depreciation of the portfolio than to the current dividend and interest income.
I f this procedure is followed, investment-trust reports will be more informative
to investors in that the income account will then clearly set forth merely the
net result as between current income and current outgo, and this information,
separated from security profits, is of particular value to holders of prior securi
ties bearing a fixed rate of return. Furthermore, there would thus be elimi
nated any basis for the illusion that occasional profits realized on the sale of
securities form a proper basis for measuring continuing earning power. Where
this is done it would appear to be quite proper to add as a footnote to the
income account a statement showing the change which has taken place in this
reserve or special surplus account
The accumulation of net profits from security transactions in a reserve or
special surplus account will not make them unavailable for distribution in the

STOCK EXCHANGE PRACTICES

form of special dividends, either in stock or in cash. Such dividends, when
declared, should, however, carry with them a clear indication of their character,
and the development of confusion between income received by shareholders by
virtue of regular current earnings or extraordinary and nonrecurrent earnings
would be prevented.
However, if realized trading gains or losses are to be included in the income
account, then it is essential that certain principles should be strictly observed.
If either gains or losses are to be included in the income account, both of
them shonld be so included. If reserves are set up against an indicated but
unrealized depreciation of securities, these reserves should be provided in the
first instance by a direct charge to income account in the year in which they are
established. If, subsequently, they are utilized in whole or in part, the full
realized loss should first be included in the income account and the utilization
of the reserve should be reflected thereafter as a transfer from reserve to the
credit of income account.
In the event that a general rserve is set up to cover a possible future impair
ment in the value of securities, this reserve may be created by a direct charge
to earned surplus. However, should it subsequently become necessary to Use
this reserve in whole or in part, the losses incurred should in the first instance
be shown in income account, and the income account should be subsequently
credited with that part of the reserve which it is intended to use.
The method of computation of trading gains or losses varies considerably
as between companies. Where these gains and losses are both excluded from
the income account, and where net realized trading gains are not held to be
available for ordinary dividends, the method in which they are computed is of
relatively less importance than in other cases. In ca.ses where such realized
trading gains appear in the income account and are regarded as available for
distribution in the form of current dividends, the method of computing these
figures assumes real importance.
Of the various methods of computation known to the committee for the purpuse of reporting, the method of computing cost of securities sold upon the
basis of the average cost appears to be the only one which does not result in
a distortion of the income account. Therefore, we urge upon all corporations
who treat net realized trading gains as part of the income account and avail
able for dividends to adopt that method.
Whatever the method of computing realized trading gains or losses may be,
it is imperative that investment trusts state clearly in their reports the method
in actual use, and particularly that they call attention to any change of
method, or to the use of more than one method during an accounting period.
PRACTICE

The question of investment trust practice is one of even more vital concern
to the investor than any question having to do with the form of presentation
of annual reports or of accounting methods on which these reports are based.
The investment trust is relatively new to American finance, and investmenttrust practice is in the early stages of a gradual crystallization. On this ac
count it seems proper to put forth certain general observations in the hope
that in so doing the development of investment-trust practice along sound lines
may be advanced.
Recognizing that it is too early to deal with the subject in anything like a
comprehensive manner, it is proposed at this time to limit the discussion of
practice to certain phases of the following general topics:
I. Reacquisition of outstanding securities.
II. Acquisition of securities of other investment trusts.
III. Dividend policies.
IV. Directorates.
I. Reacquisition of outstanding securities
The general question of the propriety of an investment trust reacquiring its
own securities has to be viewed in the light of the capital structure of the com
pany in question and of the purpose for which the reacquisition has been under
taken. In the matter of capital structure companies can be divided broadly
into two classes: Those having prior securities outstanding and those having
merely common stock outstanding.
In the case of companies having prior securities outstanding the reacquisition
of outstanding bonds appears in general unobjectionable.

100

STOCK EXCHANGE PRACTICES

The reacquisition of outstanding preferred shares would appear to be un
objectionable: (®) For the purpose of retirement; (&) for the purpose of
resale under proper provisions to management in connection with, manage
ment plans; (a) for the purpose of reissue in connection with plans of con
solidation or merger; provided that in each instance the stock reacquired had
been purchased at a fair price, and that its reacquisition had not impaired sub
stantially the equity behind any outstanding securities senior to it in character.
The reacquisition of common shares would appear in most cases to be open to
the objection that it would tend to reduce the equity in back of prior securities
upon which the holders of these securities are justified in relying. Where com
mon stock is reacquired for the purpose of prompt reissue in connection with
the acquisition of assets, this objection may lose its validity.
In the case of companies having only common stock outstanding the reacquisi
tion of such stock appears unobjectionable when acquired: (a) For the pur
pose of retirement; (6) for the purpose of resale under proper provisions to
management in connection with management plans; (c) for the purpose of re
issue in connection with plans of consolidation or merger; provided that in
each instance the stock reacquired had been purchased by the company at not
in excess of its asset value as at the date of purchase.
Nothing in the foregoing is intended in any way to suggest the approval of
investment trusts carrying on operations in the nature of trading in their own
securities.
In any case where profits result from the purchase and sale by an investment
trust of its own stocks these profits should be credited directly to capital
or capital surplus and not to income.
II. Acquisition of stock of other trusts.
The committee on stock list in general finds nothing objectionable in an
investment trust acquiring the preferred stock of other investment trusts
provided the preferred stock so acquired is properly protected.
The question of the propriety of an investment trust acquiring the common
stock of another investment trust appears to the committee to be very different
in character.
In the case of the acquisition of interests in other investment trusts the
feeling of the committee is that this procedure should in general be discouraged
as containing within itself the possibility of unsound pyramiding and as in
volving to a degree the delegation to others of a responsibility for the invest
ment of funds which the management had assumed in connection with the
operations of their own company.
It is suggested that the extent of such investments has some bearing on the
propriety of them, and on this account it is felt that investment-trust manage
ment should keep their investments in other investment trusts within such
bounds as to clearly relieve them of any possible justifiable criticism.
III. Dividend policies
The committee on stock list considers it unwise for investment trusts to
declare dividends on their common stock unless the total revenue of the cor
poration from the date of its organization to the date of such dividend declara
tion has been in excess of its expenses and dividends paid during such period
by an amount sufficient to cover the dividend in question and also any net
realized loss together with provision for any net unrealized loss accrued
during the same period.
However, instances have been drawn to the attention of this committee
which suggests that a strict interpretation of this view might at times work a
real and unjustifiable hardship on investors. Accordingly, the committee at
this time desires merely to express the view that investment trusts should not
pay regular dividends on their common stock unless the total revenue of the
corporation, exclusive of any net realized losses, from the date of its organiza
tion to the date of such dividend declaration has been in excess of its expenses
and dividends paid during such period by an amount sufficient to cover the
dividend in question. Any net realized or unrealized loss may be disregarded
for the purpose of this calculation, provided that a notice, conforming to the
agreements of the stock exchange in this respect, is sent to the stockholders
with the dividend.

STOCK EXCHANGE PRACTICES

101

IV. Directorates
It has been urged that the public interest in investment trusts is entitled to
adequate representation on directorates, and that such independent representa
tion should be had through qualified individuals not directly affiliated either
with the management of the trust itself or with its banking sponsors, if any.
It is felt that in default of such representation the possibility of question
able transactions between investment trusts and their banking sponsors exists,
and that this danger may lead to the feeling that investment trust® are not
always managed with an eye single to the interests of their own stockholders.
Against any such suspicion investment trusts should be protected, and this
protection will in the long run prove a benefit not only to the public but to the
trusts themselves, and the banking houses with which they are at times
identified.
It appears to the committee as if such protection could be most readily
obtained by independent directors under whose scrutiny and friendly criticism
contemplated transactions would pass for review.
This view will weigh with the committee in considering listing applications.
Recommended to the governing committee by a joint meeting of the law com
mittee and the committee on stock list held April 17, 1931.
A s h b e l G r e e n , SecretaryAdopted by the governing committee April 22, 1931.
A s h b e l G kh en , Secretary.
A greem ents

fob

I n v estm en t T r usts

(To be made part of applications where applicable)
T h e _____________________, in consideration of the listing of the securities
covered by this application, agrees with the New York Stock Exchange as
follows:
1. To notify the New York Stock Exchange promptly of any change in the
general character or nature of its business.
2. To notify the stock exchange promptly in the event of any substantial
change in the management or affiliations of the corporation.
3. To publish within 30 d:iys after the close of each fiscal year, and submit
to stockholders at least 15 days in advance of the annual meeting of the cor
poration, a balance sheet, an income statement for the last fiscal year and a
surplus statement of the applicant company as a separate corporate entity and
of each corporation in which it holds directly or indirectly a majority of the
voting stock; or, in lieu thereof, eliminating all intercompany transactions:
(a)
A similar set of financial statements fully consolidated as to the appli
cant company and all corporations in which it owns directly or indirectly a
majority of the voting stock; or (&) a similar set of financial statements con
solidated as to the applicant company and specifically named or described
subsidiaries, with separate similar financial statements for each unconsolidated
corporation in which the applicant company holds directly or indirectly a
majority of the voting stock.
Such statements shall disclose fully the nature and extent of the interest
of the applicant company in the corporations whose unconsolidated financial
statements are furnished, and also the existence of any default in interest,
cumulative dividend requirements or sinking fund or redemption fund require
ments of any of the corporations whose accounts are thus consolidated or
separately shown.
4. To publish in each annual report, as a footnote to the balance sheet, a
statement showing the aggregate value of securities held directly, or indirectly
at the close of the period, based upon market value for all securities listed on
recognized stock exchanges and upon fair appraisal of other securities, com
pared with the aggregate cost of such securities.
5. To publish in each annual report a footnote to the income account show
ing the increase or decrease during the current year of the amount by which
the market value of securities held exceeds or is less than their book value.
6. To publish in each annual report a list of securities held showing names
and quantities, provided, however, that an amount equal to (10) per cent
of either the combined capital and surplus of the corporation or of the cost
of the securities, whichever is lower, may be combined under the heading

102

STOCK EXCHANGE PRACTICES

“ Miscellaneous.” This list Shall disclose the aggregate cost of the securities
and their aggregate market value, and in the case of securities not listed on
either the New York Stock Exchange or the New York Curb Market, the price
at which each such holding is inventoried for the purpose of determining
aggregate market value will be clearly set forth with such information as may
be required to support such valuation.
7. To append to all annual financial statements and inventories required by
the committee the certificate of a public accountant qualified under the laws of
some State or country, which certificate shall include a statement that no one
of the items carried under the term “ Miscellaneous ” in the list of investments
has been held for more than one year.
8. To publish all future annual financial statements of any character in the
form contained in the listing application and, in the publication of reports of
earnings for any period of less than a fiscal year, to show net profits in the
aggregate and per share after depreciation, depletion, income taxes, and interest,
estimating the proportionate amount of these items as accurately as may be if
not finally determined at date of publication.
9. Not itself, and not to permit any subsidiary, directly or indirectly con
trolled, to take up as income stock dividends received at an amount greater than
that charged against earnings, earned surplus, or both of them by the issuing
company in relation thereto.
10. Not to pay any cash or stock dividends on common stock when such
dividends, plus the amount by which the current value of securities held shall
be less than their cost, exceed the earned surplus and undivided profits, without
at the time of the payment of such dividends sending to stockholders a state
ment, in a form which has been approved by the committee on stock list, setting
forth clearly the net impairment which will exist after the payment of such
dividends stated both in aggregate dollars and dollars per share of common
stock. If at the time of the payment of any such dividends the corporation
has senior securities outstanding, such statement shall, in addition, state in
terms of percentage the ratio of the common-stock equity remaining after the
declaration of such dividends to such senior securities, taken at par value or
the sum to which they would be entitled upon involuntary liquidation, which
ever is the greater. For the purpose of this agreement, stock dividends shall
be charged against earnings on a basis approved by the committee on stock list.
11. To notify the stock exchange, on behalf of itself or any subsidiaries which
have been or may be formed, of any change in the terms of any management
contract existing at the time of listing and of the terms and conditions of con
tracts subsequently consummated.
12. To maintain, in accordance with the rules of the stock exchange, a trans
fer office or agency in the Borough of Manhattan, city of New York, where all
listed securities shall be directly transferable, and the principal of all listed
securities with interest or dividends thereon shall be payable; also a registry
office in the Borough of Manhattan, city of New York, south of Chambers Street,
other than its transfer office or agency in said city, where all listed securities
shall be registered. If its transfer books should be permanently closed, to
continue to split up certificates of listed stock into smaller denominations in the
same name so long as such stock shall be retained upon its list by the New York
Stock Exchange. If its transfer office or agency should be or should become
located north of Chambers Street, to arrange, at its own cost and expense, that
its registry office will receive and redeliver all securities deposited at such
registry office for the purpose of transfer.
13. To notify the/stock exchange 30 days in advance of the effective date of
any change in the authorized amounts of listed securities.
14. Not to add to the number of its transfer agencies nor to make any change
of a transfer agency, or of a trustee of its listed bonds or securities, without
prior notice to the committee on stock list, and not to add to the number of
registrars of its listed stock nor to change a registrar of its listed stock without
the prior approval of the committee on stock list, nor to select an officer or
director of the company as a trustee of its mortgages or other listed securities
unless such officer or director be a cotrustee for an issue having a corporate
trustee.
15. Not to make any change in the form or nature of its listed securities or
in the rights or privileges of the holders thereof without having given 20 days’
prior notice to the committee on stock list of such proposed changes, and having
made application for the listing of the securities as changed, if the committee
on stock list so requires.

STOCK EXCHANGE PRACTICES

103

16. To notify the stock exchange in the event of the issuance or creation in
any form or manner of any rights to subscribe to, or to be allotted, its securi
ties, or of any other rights or benefits pertaining to ownership in its securi
ties, and to afford the holders of its listed securities a proper period within
which to record their interest and to exercise their rights, and to issue all such
rights in form approved by the stock exchange and to make the same trans
ferable, payable and deliverable in the Borough of Manhattan, city of New
York.
17. To notify the stock exchange promptly in the event of issuance of options
or warrants to purchase stock, otherwise than (a) pro rata to stockholders,
(6) to officers and employees under a general employees’ stock purchase plan,
(c) firm offers of stock to be taken in a block within four months from the
date of such offer, of the number of shares covered by such options, of their
terms and of the time within which they may be exercised and of any subse
quent changes therein and thereafter to include this information together with
like information as to any options in existence at the time of approval of this
application so long as said options are outstanding, in all annual financial re
ports furnished to stockholders and in all formal published reports.
18. Not to purchase or otherwise acquire for its own account, or indirectly
through a subsidiary, shares of its common stock, however designated, other
wise than under exceptional and special circumstances. In case any such
purchase is made, to submit promptly to the committee on stock list all relevant
facts in connection therewith, and upon request of the committee to take such
steps as the committee deems necessary to make such reacquired shares un
available for trading without further application.
19. To make application to the stock exchange for the listing of additional
amounts of listed securities sufficiently prior to the issuance thereof to permit
action in due course upon such application.
20. To publish promptly to holders of listed stock any action in respect to
dividends on shares, or allotments of rights for subscription to securities, notices
thereof to be sent to the stock exchange, and to give to the stock exchange at
least 10 days’ notice in advance of the closing of the transfer books, or exten
sions, or of the taking of a record of holders for any purpose.
21. To forward to the stock exchange copies of all notices mailed to stockhold
ers looking toward charter amendments, and to file with the stock exchange
two copies of amended charter, or resolutions of directors in the nature of
amendments, as soon as such amendments (one of which must be certified), or
resolutions have become effective.
22. Not to purchase listed preferred stock for retirement at a price in excess
of that at which the stock purchased might then be obtained in the open
market and not to select preferred stock for redemption otherwise than pro
rata or by lot; to notify the stock exchange immediately and at least 15 days
in advance of any such redemption, and to furnish to the stock exchange any
information requested in reference to such redemption.
23. To notify the stock exchange of the change or removal, to a substantial
extent, of collateral deposited under any of its mortgage or trust indentures
under which listed securities are outstanding.
24. To have on hand at all times a sufficient supply of certificates to meet
the demands for transfer.
25. If at any time the stock certificates of the company do not recite the
preference of all classes of stock the company agrees with the exchange that it
will f u r n i s h stockholders, upon request and without charge, with a printed
copy of the preferences of all classes of stock.
26. To furnish the New York Stock Exchange, on demand, such reasonable
information concerning the company a ; may be required.
By

Sp e c ia l

Q u e s t io n n a ir e

R eg a r d in g P l a n s a n d
C e r t if ic a t e s o f D e p o s it

A greem ents

C o v er in g

This questionnaire accompanies application for the listing of certificate of
deposit fo r --------------- o f -------------------------------------------------Co.
1. Is it provided that deposits may be made, without penalty, for at least 30
days after listing______________________________________________________
If not, will you so provide? ______________________________________________

104

STOCK EXCHANGE PEACTICES

2. What specific date is named for return of the deposited securities in the
event that the plan does not become operative? ________________________
If no such date has been named, state a date to which you will consent for
this purpose. __________________________________________________________
3. Are there any prescribed conditions under which the plan must become
operative? _____________________________________________,__________ ____
If so, state them __________________________________________________________
4. Is there any provision by virtue of which, in the event of abandonment of
the plan, deposited securities may be sold if certificates of deposit are
not surrendered within a specified time? _________________ ____________
If so, will you agree to eliminate this provision? _________________________
5. Are there any unusual provisions in this deposit agreement? __________1___
If so, state them __________________________________________________________
6. In the event that a plan is adopted, is it provided that notice by mail shall
be given to all registered holders of certificates of deposit simultaneously
with the publication of notice? ________________________________________
If not, will you please do so? _____________________________________________
7. State the time allowed to depositors to withdraw after a plan has been sub
mitted for adoption. __________________________________________________
If this time is less than 30 days, will you agree to extend it 30 days? ______
8« In the event of any modification of the agreement or of the plan being
adverse to depositors, is it provided that notice by mail shall be given to
all registered holders of certificates of deposit simultaneously with pub
lication of notice? ____________________________________________________
If not, will you agree to do so? ___________________________________________
9. State the time allowed to depositors to withdraw in the event of adverse
modification of the agreement or of the p lan ___________________________
If this time is less than 30 days, will you agree to extend it to 30 days? ____
10. Are any charges assessable against depositors upon withdrawal from the
agreement or plan? -----------------------------------------------------------------------------If so, under what conditions and with what limitation? ----------------------------

A greem ents

b y tto t in g

T rustees

(To be made part of applications where applicable)
The undersigned voting trustees, in consideration of the listing of the secu
rities covered by this application, agree with the New York Stock Exchange as
follows:
To maintain, in accordance with the rules of the stock exchange, a transfer
office or agency in the Borough of Manhattan, city of New York, where all
listed securities shall be directly transferable, and the principal of all listed
securities with interest or dividends thereon shall be payable; also a registry
office in the Borough of Manhattan, city of New York, south of Chambers
Street, other than their transfer office or agency in said city, where all listed
securities shall be registered. If their transfer books shou’d be permanently
closed, to continue to split up voting trust certificates into smaller denomina
tions in the same name so long as such voting trust certificates shall be retained
upon its list by the New York Stock Exchange. If their transfer office or
agency should be or should become located north of Chambers Street, to
arrange, at their own cost and expense that their registry office will receive
and redeliver all securities deposited at sueh registry office for the purpose
of transfer.
Not to add to the number of their transfer agencies, nor to make any change
of a transfer agency without prior notice to the committee on stock list, and
not to make any change in their listed securities, nor to add to the number of
their registrars, nor to change a registrar, without the prior approval of the
committee on stock list.
To notify the stock exchange in the event of the issuance or creation in any
form or manner of any rights to subscribe to, or to be allotted their securities,
or of any other rights or benefits pertaining to ownership in their securities,
and to afford the holders of their listed securities a proper period within which
to record their interests and to exercise their rights, and to issue all such
rights in form approved by the stock exchange and to make the same trans
ferable, payable, and deliverable in the Borough of Manhattan, city of New
York.

105

STOCK EXCHANGE PRACTICES

To make application to the stock exchange for the listing of additional
amounts of listed securities sufficiently prior to the issuance thereof to permit
action in due course upon such application.
To publish promptly to holders of voting trust certificates any action in
respect to dividend on shares thereby represented, or allotments of rights for
subscription to securities, notices thereof to be sent to the stock exchange,
and to give to the stock exchange at least 10 days’ notice in advance of the
closing of the transfer books, or extensions, or of the taking of a record of
holders for any purpose.
To have on hand at all times a sufficient supply of voting trust certificates
to meet the demands for transfer.
To notify the stock exchange in advance of any extension of the voting trust
agreement and to make such application to the stock exchange as may be
required (if any) for the listing of the extended voting trust certificates
sufficiently prior to the extension of the voting trust agreement to permit
action in due course upon such application.
By
S p e c i a l R e q u ir e m e n t s

fob

L i s t in g F oreign S h a r e s

Subject to its right to waive or amend these requirements, the committee
on stock list has adopted the following requirements for listing foreign shares :
1. To be available for listing, foreign shares must be in the form of certificates
issued by an approved American institution or by the American branch of an
approved foreign institution based upon the deposit with a foreign correspondent
of the original foreign shares.
2. Applications must be signed by the company and indorsed by bankers to the
issue satisfactory to the committee on stock list or must be made on behalf of
and signed by bankers to the issue satisfactory to the committee on stock list.
3. Conditions of issuance of certificates of deposit must be such that shares
deposited abroad may be released upon cable advice upon the cancellation of
such certificates of deposit and that additional certificates of deposit may be
issued in New York upon cable advice from the foreign depositary of the deposit
of additional shares. The committee may approve restrictions upon such inter
changeability for a reasonable period.
4. Until further action certificates of deposit should be in registered form
only. The precise form will be considered at the time of application without,
until further notice, prescribed rules in relation thereto, excepting that such
certificates should comply with requirements of New York State law as to
negotiability. The agreement covering such certificates of deposit must pro
vide that no original foreign shares against which there are any outstanding
“ oppositions ” shall be accepted for deposit and must also provide for the pub
lication to American certificate holders of a summary, in the English language,
of the current annual reports of the company.
5. Application should name the exchanges upon which the security is listed
and whether it is dealt in for the term settlement or for the cash settlement
only.
6. The application must state affirmatively that there are no governmental
restrictions against the payment of interest or dividends to American holders or
against the payment of the proceeds of sale to an American holder who sells in
the market of origin.
7. In determining availability for listing, the committee will give con
sideration to all matters affecting marketability, including the total number of
shares issued, the initial number upon the American market, and the facility
with which domestic and international transactions may be effected. The
application should give all facts necessary for the determination of these
questions.
8. No foreign share securities will be listed unless the company or its prede
cessor or constitutent companies has been in operation for at least two full
years. The application should include the last two annual balance sheets and
income statements for at least two full years.
9. The share securities of small companies will not be listed. In considering
size available for listing, the nominal capitalization, the market price of securi
ties to be listed, and the amount of the earnings will be accorded due weight.

106

STOCK EXCHANGE PRACTICES

10. No securities will be listed of any foreign company which is in default
in any of its obligations, other than default occasioned by currency depreciation
beyond control of the company. A statement in regard to this should appear
in the application.
11. Until further action by the committee, it will not recommend for listing
corporate securities the nominal value of which is expressed in terms of, or
the income from which is payable to security holders in, a currency which is not
upon a gold basis.
12. Applications should state specifically that provision has been made for
maintenance of a fiscal agent in New York City, where all dividends on out
standing American certificates will be payable at current rates of exchange.
Such dividends should be remitted promptly and paid to certificate holders by
check without deduction, except for reasonable charges and necessary expenses.
Where desired the fiscal agent can be the same institution which issues the
American certificates. Such fiscal agent or the institution issuing the Ameri
can certificates must agree to taail to registered holders thereof, at their last
known address, copies of all notices received affecting the interests of such
holders in the deposited securities.
13. Each application should state clearly all taxes which, under existing
law, may be imposed upon the holder of American certificates, directly or
indirectly.
14. Accounting statements appearing in the application must be in form
satisfactory to the committee and, as far as possible, should disclose the same
amount of information in regard to the affairs of the foreign company as are
normally disclosed by the application of an American company.
15. The application should contain a sumlnary of all important provisions
of the actions under the authority of which the securities to be listed are issued
and should be accompanied by an English translation of all papers and docu
ments required for domestic listings.
16. The nature of the disposition of the proceeds of a corporate issue will be
a factor affecting its availability for listing.
17. The application should include a detailed statement of any fees, other
than those ordinarily applying in the case of domestic securities, which may be
charged to any one holding or dealing in the securities and should state to
whom such fees are payable.
C o m m it t e e

S to ck L is t , Ne w Y ork S to ck E x ch an g e
FOREIGN GOVERNMENT BONDS
F ebru ary

2,1925.

Data required in addition to regular requirements in connection with proposed
listings
1. (a) Statement of debt, internal and external, and currency in which it is
to be paid; statement of external debt to be computed in dollars; (&) contingent
and actual liabilities and priority; (c) revenue or assets pledged, if any, under
present and other loans, and nature of administration; (<£) summary of such
revenue receipts and income from such assets for preceding five years, stated in
dollars, if available; (e) status of the law under which said revenue or assets
are pledged.
2. Past debt record with respect to (a) defaults; (6) scaling down interest
payments; (o) suspending sinking-fund payments.
3. Where listed.
4. Currency in which interest and principal are to be paid.
5. Tax liability and exemption.
6. Statement of governmental income and expenditure for whatever account
in the preceding five years.
7. Statement of the sums required, in dollars, to meet foreign interest charges
in each of the five preceding years.
8. Statement in terms of weight and dollars (converted) of merchandise im
ports and exports in each of the preceding five years.
9. Statement of covenants, if any, with respect to payment of principal and
interest of bonds dependent upon state of peace or war and nationality of
holder.

STOCK EXCHANGE PRACTICES

107

Resoived, That application be made to the New York Stock Exchange for the
listing o f --------- of this corporation and th a t---------- be designated by the cor
poration to appear before the committee on stock list of said exchange, with
authority to make such changes in said application or in any agreements
relative thereto as may be necessary to conform with requirements for listing.
The bank-note companies whose work the committee on stock list is author
ized to pass upon are as follows:
The American Bank Note Co., with subsidiary company or division, the
Western Bank Note & Engraving Co. of Chicago. New York office, 70 Broad
Street
Bradbury, Wilkinson & Co. (Ltd.), New Malden, Surrey, England.
The British American Bank Note Co. (Ltd.), Ottawa, Ontario, Canada.
Canadian Bank Note Co. (Ltd.), Ottawa, Ontario, Canada.
Central Bank Note Co., 319-331 North Albany Avenue, Chicago, 111. New
York office, 233 Spring Street.
Columbian Bank Note Co., Chicago, 111. New York office, 52 Wall Street
Giesecke & Devrient, Leipzig, Germany. (Bonds only.)
The Hamilton Bank Note Engraving & Printing Co., 142 Adams Street,
Brooklyn, N. Y.
Jeffries Bank Note Co., 117 Winston Street, Los Angeles, Calif.
Northern Bank Note Co., 2340 North Racine Avenue, Chicago, 111.
Quayle & Son Corporation, 19 Chapel Street, Albany, N. Y. New York office,
149 Broadway.
Reichsdruckerei in Berlin, Germany. (Bonds only.)
The Republic Bank Note Co., Pittsburgh, Pa. New York office, 31 Nassau
Street
Security Bank Note Co., Philadelphia, Pa. New York office, 20 Broad Street;
Chicago office, 208 South La Salle Street.
Waterlow & Son (Ltd.), 26-27 Great Winchester Street, London, England.
E. A. Wright Bank Note Co., Broad & Huntingdon Streets, Philadelphia, Pa.
New York office, 280 Broadway.
S. Lankhout & Co. (Ltd.), The Hague, Holland.

A m e n d e d S t a t e m e n t R eg a r d in g A s s o c ia t io n
I n vestm en t T rusts

M em ber F ir m s W it h

The committee on stock list, under the authority conferred upon it by the
governing committee, hereby changes and amends the rules announced in a
statement approved May 7, 1931, regarding association of member firms with
investment trusts by striking out the words'—
“ except that members who on May 7, 1931, were so associated with an invest
ment trust may relieve themselves temporarily from the operation of this rule
by filing with the committee on stock list on or before May 31, 1931, a letter
setting forth in detail any such existing association.
“ The exception is made in order that members may not be disturbed in carry
ing on for the time being their existing associations with fixed or restricted
management type investment trusts. Their obligation for the moment is limited
to making to the committee on stock list a full statement of any such associa
tion.
“As soon as the committee on stock list concludes that a reasonable time has
been allowed for all members having such associations to present the facts so
that the committee on stock list may be able to determine whether the associa
tion is objectionable or not, the committee will fix a time after which the
association of members with fixed or restricted management type investment
trusts will be limited strictly to such trusts as shall have met the requirements
of the committee.”
and by amending said rules to read as follows:
The governing committee at its meeting on May 7,1931, on the joint recom
mendation of the committee on business conduct and the committee on stock
list, amended section 2 of Chapter X IV of the rules adopted by the governing
committee pursuant to the constitution so as to read:
“ S eo . 2. No member or firm registered on the exchange shall be associated
with an investment trust, whether management, restricted management, or
fixed type, either by participating in its organization or management or by

108

STOCK EXCHANGE PRACTICES

offering or distributing its securities, unless the committee on stock list shall
have previously determined that it has no objection to such association and
shall not have changed such determination.”
and adopted the following resolutions:
“ Resolved, That, in addition to the powers conferred on it by the constitu
tion, the committee on stock list is authorized to make such rules and regula
tions as it may deem necessary in regard to the association of a member or
firm registered on the exchange with an investment trust.
“ Further resolved, That the committee on stock list is authorized to deter
mine the time and manner in which it shall give effect to the recent amendment
of section 2 of Chapter XIV of the rules adopted by the governing committee
pursuant to the constitution.”
Pursuant to the authority conferred on it by these resolutions, the com
mittee on stock list has adopted the following rules:
No member or firm registered on the exchange may hereafter be associated
with a fixed or restricted management type of investment trust, either by partici
pating in its organization or management or by offering or distributing its
securities, unless the committee on stock list shall have determined that said
trust is one with which the association of a member or firm registered on the
exchange in any of the foregoing capacities appears unobjectable and shall not
have changed such determination.
The committee on stock list does not intend to make an announcement of its
determination as to whether it finds membership association with any particular
investment trust unobjectionable until after such time as may prove to be
necessary to examine all applications received prior to a short period before
such announcement. This determination is in order to enable it to announce
simultaneously its decision as to a number of investment trusts without
preference of one over the other.
At the time of such announcement a bulletin will be sent to members giving
the names of all investment trusts of the fixed or restricted management type
as to which the committee on stock list shall have determined that it has no
objection to association by a member or firm registered on the exchange. The
bulletin will fix a date after which association with any investment trust not
listed in such bulletin or in a later bulletin will be deemed objectionable.
In the meantime, as a temporary measure and until the issuance of the first
bulletin, the committee on stock list will deem association by members or firms
registered on the exchange with investment trusts of the fixed or restricted
type unobjectionable irrespective of the date of the formation of such invest
ment trust or of the date when such association began and irrespective of
whether or not any information in regard to such investment trust has hereto
fore been filed with any committee of the stock exchange, provided the following
conditions are observed:
1. The member or firm registered on the exchange shall file a letter with the
committee on stock list stating the name of the investment trust and the detailed
facts concerning such association. With respect to any existing association,
such letter should be filed immediately. With respect to any association formed
subsequent to the date of the issuance of this statement, the letter should be
filed within three days after any such association.
2. The letter should state that the member or firm registered on the ex
change has received a letter from the investment trust named or from its
depositor corporation reciting (a) that no objection has heretofore been made
by the committee on business conduct as to. any of Hie features of such invest
ment trust; (6) if such objection has been made, that the objectionable fea
tures of such investment trust have been removed; (o) that it is the intention
of the investment trust to make application promptly to the committee on stock
list for determination with respect to the association of a member or firm
registered on the stock exchange with such investment trust; (d) that the
investment trust believes that it can, pursuant to the requirements heretofore
issued, establish that such association with such investment trust by a member
or firm registered on the exchange is unobjectionable; and (e) .that pending
action upon such application to the committee on stock list it will in all
respects conform to the letter and spirit of said requirements in good faith
and to the best of its ability.
The foregoing temporary regulations are made in order not unduly to hamper
the conduct of business between members and fixed dr restricted management
type investment trusts during the period of the examination of what may
prove to be a large number of applications.

STOCK EXCHANGE PRACTICES

10$

The obligation of members and of firms registered on the exchange, with
respect to the rules and regulations promulgated by the committee on stock
list, will not, for the immediate present, extend beyond compliance with the
conditions above stated. It will not be necessary for members who, prior to
the date of the issuance of this statement, have advised the committee on
stock list of their associations existing on May 7, 1931, to take any further
action as to the investment trust named by them in such advice, except as
may be indicated by correspondence with the exchange arising out of such
notification.
For the purpose of these requirements the association with a fixed or re
stricted management type investment trust, of a partner in a firm registered
on the exchange, even though such partner is not himself a member, will be
regarded as association on the part of the registered firm with such invest
ment trust. In cases, however, where such association of a nonmember partner
of a registered firm is confined to a directorship in a depositor corporation and
where no other member of the firm is connected in any capacity with the invest
ment trust, consideration will be given to the facts and circumstances which
should be set forth in writing. In the discretion of the committee on stock
list, an exception to the general rule may be made in such cases.
Dealing in the certificates of a fixed or restricted management type invest
ment trust in the execution of unsolicited orders solely as a broker or over
the counter will not be regarded as an association with such an investment
trust or as bringing a member within the foregoing rules, provided no commis
sion or dealers’ profit is received, directly or indirectly, from the investment
trust or the depositor corporation.
Under the statement and requirements recently sent out it will be necessary
for all investment trusts of the fixed or restricted management type desiring
to retain the association of a member or firm registered on the exchange to
make application to the committee on stock list, irrespective of whether or not
information concerning such trust has heretofore been filed with any commit
tee of the exchange and irrespective of the previous action of any committee
of the exchange.
The requirements, including instructions regarding the application and agree
ment to be submitted, have been prepared and are now available for dis
tribution.
Members are urged to bring this matter promptly to the attention of fixed
and restricted management type of investment trusts with which they are or
plan to become associated.
For the time being, the existing requirement that members must submit for
approval all documents relating to management type investment trusts in the
organization or management of which they participate will be continued, except
that in the future all such documents shall be submitted to the committee on
stock list instead of to the committee on business conduct as heretofore.
Adopted May 20, 1931.
R e q u ir e m e n t s f o e F ix e d or R e s t r ic t e d M a n a g e m e n t T y p e I n v e s t m e n t T r u s t s
W i t h W h i c h M e m b e r F i r m s a b b S e e k i n g A u t h o r i t y fo r A s s o c ia t io n i n
C o n n e c t io n W i t h T h e i r O r g a n iz a t io n or M a n a g e m e n t or W i t h t h e D i s
t r ib u t io n o f T h e i r S e c u r it ie s

The New York Stock Exchange is not prepared to express any opinion
regarding the soundness of the principles underlying the formation of invest
ment trusts of the fixed or restricted management type. It recognizes the wide
popularity of such vehicles of investment and the fact that its members, whose
business is dealing in securities, may properly' enter into association with such
investment trusts or their sponsors either in their formation, management,
or the distribution of their securities, provded that the set-ups of such trusts
do not contain provisions which in themselves appear to operate to the detri
ment of those who invest in their securities, and further provided that the
information afforded to the public in connection therewith is not such as to be
misleading or conceal pertinent facts.
It should be fully understood, however, that the matters to be passed upon
in this connection by the committee on stock list will have to do only with the
question of trust provisions and of publicity which might tend to mislead the
public, and will not be concerned with the question of the soundness of the idea
behind trusts of the fixed or restricted management type.
119852— 33—

a p p . --------------8

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STOCK EXCHANGE PRACTICES

The committee on stock list is now prepared to pass on the question of whether
a given fixed or restricted management type investment trust is one with
which the association of a member or firm registered on the exchange appears
to be unobjectionable. The right to amend these requirements without notice
is reserved.
In order to qualify in this category fixed or restricted management type
investment trusts must make application to the exchange and enter into an
agreement with the exchange in the form prescribed by the committee on stock
list.
a pp l ic a t io n

An application concurred in or sponsored by a member of the exchange or a
member firm must be submitted in 12 printed copies. It must contain a suit
able opening paragraph requesting the stock exchange to determine whether
the applicant is a fixed or restricted management type Investment Trust with
which the association of a member or firm, in connection with its organization
or management or with the distribution of its securities, appears to be
unobjectionable.
Thereafter it should give the following information:
1. Name of depositor corporation.
2. Date of organization of depositor corporation.
3. Names of the officers and directors thereof.
4. Date of execution of trust agreement and of initial public offering.
5. Name of trustee.
6. Number of shares or trust certificates, if any, outstanding in the hands of
the public.
7. Details of composition of a unit and number of trust certificates evidencing
participation therein.
8. A clear statement in regard to the following facts:
1. Whether the indenture or trust agreement provides that all of the prop
erty forming part of the trust must be treated by the trustee as trust property,
with a description of any exceptions.
2. Statement of the period after termination of the trust during which
unclaimed funds must be retained by the trustee.
3. Statement of provisions in regard to giving notice to the beneficiaries as
to termination of the trust.
4. Statement of the conditions under which individual trust certificate
holders may terminate the trust as regards certificates owned by them.
5. A statement as to any of the duties and obligations ordinarily assumed by
a trustee of a personal trust under a deed which are delegated to others than
the trustee, or in regard to which the trustee may recieve instructions from
others, naming the persons or institutions who may thus influence the manage
ment of the trust.
6. A statement as to whether the trustee assumes full responsibility for the
determination of the market value of the deposited property in connection
with the surrender or maturity of trust certificates; whether it assumes respon
sibility for the determination of the genuineness and validity of the deposited
securities; whether it assumes the responsibility of determining the time,
place, and manner in which eliminated securities shall be sold; whether it
assumes the responsibility of determining the time, place, and manner in
which additional securities shall be purchased, if the proceeds of eliminated
or other property are to be reinvested; and whether it assumes full respon
sibility for the validity of the certificates issued by it.
7. A concise statement of the provisions for giving certificate holders the
right to exercise a vote as to their interest in deposited securities.
8. A statement of the method in. which stock dividends, rights, and split ups
will be treated and, if of the distributive typo, a statement of the method
of distribution of amounts received from eliminations not available for
reinvestment.
9. A statement of any provisions granting any right of extension of the trust.
10. A summary of any provision in the trust agreement as to matters in
which the depositor or the trustee may be entitled to rely upon opinion of
counsel.
11. A clear statement in narrative form summarizing all charges made
against holders of trust certificates to cover expenses and profits of either the
trustee or the depositor corporation.

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111

This should include all loading charges at time of distribution, with a state
ment as to the basis of costs to which such loading charges are applied and the
percentage of such loading charges to the value of the underlying trust property
as of the date of application, also a statement of any maintenance charges
which may be deducted from distributions during the life of the trust, relating
such charges, in terms of percentages, both to the value of the underlying trust
property as of the date of application and to the income therefrom on the basis
of current cash distributions received upon securities and property held. If
such maintenance charges assume the form of crediting to either the trustee
or the depositor corporation the interest upon a reserve fund and/or dis
tributable cash, if any, this fact must be stated and must be accompanied by an
estimate as nearly as may be made of the percentage relation of such interest
to the value of the underlying trust property as of the date of application, and
also of the percentage relation to the current cash income, as above described.
If any charge is made against certificate holders at the time of surrender of
certificates and termination of the trust, whether such termination occurs at
the instance of the certificate holder or otherwise, the amount of such charge
must be stated, expressed in terms of its percentage relation to the value of the
underlying trust property as of the date of application. Any other direct or
indirect charges or deductions must be included in this statement where the
nature of the charge permits the expression of this ratio.
12. A statement of any provisions covering elimination of the deposited se
curities, as well as of all provisions providing for substitutions.
13. A description of the reserve fund, if any, together with the amount thereof
per trust certificate outstanding at the time of the application.
14. A description of the method by which continuing maintenance charges are
to be met throughout the life of the trust.
The application in question should include agreements with the exchange in
the following form:
In consideration of the determination by the New York Stock Exchange
that --------- , a fixed or restricted management type investment trust, is one
with which the association of a member of the exchange or a firm registered
thereon, in connection with its organization or management or in connection
with the distribution of its securities, is unobjectionable, the undersigned de
positor corporation on its own behalf and for said Investment Trust agrees with
the New York Stock Exchange as follows:
1. To instruct the trustee to furnish to the committee on stock list of the
New York Stock Exchange periodical monthly reports of the number of trust
certificates outstanding and a list of eliminations and changes in the portfolio
as such eliminations or changes occur, with complete details of such transactions.
2. To submit to the committee on stock list for approval, prior to issuance, all
offering circulars and advertisements of like nature to be used by it or any
distributor under its control, together with such other advertisements and
descriptive literature as may be from time to time requested.
3. To conform in all respects to the requirements of the New York Stock Ex
change as such requirements existed at the time of application excepting in so
far as such investment trust and depositor corporation, or either of them, may
have been relieved therefrom in cases where the trust in question was formed
and the terms of its trust agreement fixed prior to the adoption by the New
York Stock Exchange of such requirements.
4. Not to permit any distributor of the securities of said investment trust or
anyone subject to the control of the depositor corporation, to advertise or to
issue circulars in any way contrary to the rules or regulations of the New
York Stock Exchange, and specifically not to include, either in advertisement or
circular, any statement tending to suggest that said investment trust has been
approved in any manner by the New York Stock Exchange.
5. In the event of changes in the requirements of the New York Stock Ex
change covering fixed or restricted management type investment trusts, to co
operate in complying therewith to any reasonable degree permitted by the terms
of the trust agreement.
6. Not to change the method of loading, the method of computing cost of
deposited property, or the method of determining price, from the methods
stated in the application, in such manner as to create an increase in such load
ing, cost or price, without the prior approval of the committee on stock list.
7. In the event that the committee on stock list shall at any time hereafter
and for any reason which, in its uncontrolled discretion, it shall deem sufficient,

112

STOCK EXCHANGE PRACTICES

change its determination that said investment trust is one with which the as
sociation of a member of the exchange or a firm registered thereon in connec
tion with its organization or management or in connection with the distribu
tion of its securities is unobjectionable, the undersigned depositor corporation
hereby waives and releases any right or claim which it might or could have
against said committee on stock list and the New York Stock Exchange by rea
son of such change of determination, prov.’ded that before said determination
shall be changed said committee on stock list shall upon seven days’ notice in
writing afford the undersigned depositor corporation an opportunity to be
heard.
FEES
For the consideration of applications prepared as outlined above, a fee of
$2,500 will be charged, which fee must accompany the application. In the
event of applications being disapproved, there will be rebated to the applicant
such portion of the fee as the committee in its discretion may determine. For
the work entailed in connection with the consideration of advertisements and
circulars, a fee may be charged which will not be in excess of $10 per adver
tisement or circular except in unusual circumstances.
DOCUMENTS TO ACCOMPANY APPLICATION

With each application the following documents in duplicate must be sub
mitted to the committee on stock list:
Charter of corporation.
By-laws of corporation.
Trust agreement or similar contract.
All other agreements affecting the trust.
Offering circular.
Make-up or price sheet.
Important advertisements issued within the last six months.
Advertisements, of a nature similar to offering circulars, in contemplation
for issuance.
Balance sheet and income statement of the depositor corporation.
STATEMENT OF POLICY

In considering applications, the following principles will govern the com
mittee on stock list.
STATEMENT AS TO TYPE OF TRUST

Neither the title of the trust, nor any descriptive literature used in regard
thereto by the depositor corporation, members of the exchange, or agencies
under the control of either, may contain words which inaccurately describe
the nature of the trust. In this connection, neither the term “ Fixed,” nor any
compound, nor derivative thereof, shall be used to describe an investment trust
in which substitutions of securities may be made; a trust may not be described
as being of the restricted management type, or other similar words, if neither
the trustee nor the depositor corporation may eliminate securities (other than
those resulting from split-ups or stock dividends) excepting under some fixed
formula on the one hand, nor if either the trustee or the depositor corporation
has a wide discretion in eliminations or substitutions on the other hand. In
vestment trusts may not be described as being of the management type without
qualification if there are serious restrictions upon the elimination or substitu
tion of securities.
Diversification.—A reasonable degree of diversification will be considered
essential.
CONCERNING THE DUTIES OF THE TRUSTEE

Appointment of trustee.— Only a bank or trust company organized and exist
ing under a State banking law or a national banking association incorporated
under the laws of the United States, having trust powers, may act as trustee.
All assets to be treated, as trust property.—All of the property in which the
holders of the trust certificates have a beneficial interest, including cash how
ever received, must be treated by the trustees in a manner similar to property held under a personal deed of trust.

STOCK EXCHANGE PRACTICES

113

Provisions in regard to termination.— Upon the termination of the trust, un
claimed funds should be retained by the trustee and proper provision in re
gard to giving notice to the beneficiaries by mail, if the certificates are registered,
and by publication, if they are in bearer form, should be included in the in
denture.
The trust agreement must provide for the termination of the trust as to any
individual trust certificate upon reasonable terms and upon reasonable notice
from its holder. If, upon such termination, part of the deposited securities must
be liquidated, not only must all fees in connection therewith be reasonable, but
the brokerage commission deductible from the amount payable to the certifi
cate holder shall not exceed, on listed securities, the commissions prescribed
by the constitution of the New York Stock Exchange as the minimum which
may be charged to nonmembers, and for unlisted securities the commission
customarily payable on similar transactions.
Administration of the trust property.—The duties and obligations assumed by
the trustee must be similar to the duties and obligations of a trustee of a per
sonal trust under a deed, and the trustee may not delegate any of its duties
to others unless the offering advertisement and circular clearly and prominently
describe the nature of the powers delegated and the persons by whom such
powers will be exercised.
The following duties should be performed by the trustee:
(1) The determination of the market value of the deposited property in
connection with the surrender or maturity of trust certificates.
(2) The determination of the genuineness and validity of deposited securi
ties.
While the committee greatly prefers to have the following duties performed
by the trustee:
(1) The determination of the time, place, and manner in which eliminated
securities shall be sold.
(2) The determination of the time, place, and manner in which additional
securities shall be purchased, if the proceeds of eliminated or other property
are to be reinvested; complications which may arise because of existing agree
ments will be given due weight.
No provision shall relieve the trustee of responsibility for the genuineness of
the certificates issuel by the trustee.
The trust agreement should provide or the trustee should agree that in all
practicable cases sales and purchases of securities will be made through a
recognized exchange and that delivery of and payment for securities elimi
nated or substituted will be between the trustee and the broker or dealer.
Voting power.—Trust agreements, or agreements supplementary thereto, must
provide that in each ease where a trust certificate holder would be entitled,
upon termination of the trust, to receive certificates for one or more full shares
of deposited stock having a vote, there will be issued to him, upon request, an
assignable proxy covering the number of full shares represented by his equity,
excepting in approved cases where definite instructions as to the manner in
which such shares must be voted in certain contingencies are prescribed in the
trust agreement. No objection is made to the voting by the depositor or by the
trustee of any deposited shares for which such proxies have not been requested.
The depositor corporation should note that, in view of the fact that the right
to vote may affect the nature of the deposited security in respect of which the
vote is exercised, trust indentures may have to provide that the certificate
holder who has destroyed the uniformity of his interest in the trust by exer
cising his right to vote shall be deemed to have terminated the trust in regard
to his certificates.
As an alternative to the foregoing, the committee will approve an agreement
by the depositor corporation providing that in any case where a substantial
controversy has arisen between two or more opposing groups of stockholders
of a company whose stock is held in the trust, or a substantial issue exists in
connection with which the interests of certificate holders require that they be
permitted to direct the voting of such stock, each certificate holder shall be
entitled to file written instruction with respect to the voting of the stock held
in the trust. Such stock shall be voted proportionately in the manner directed
by the several certificate holders, the depositor corporation, or the trustee, as
the ease may be, retaining the right to direct the vote of such proportion of the
stock as shall not be allocable to certificate holders exercising this right to

114

STOCK EXCHANGE PRACTICES

vote. In all cases where, in the judgment of the trustee or of the depositor
corporation, the result of the vote may affect the nature, identity, or rights of
the deposited stock, all of such stock held in the trust shall be voted as a unit
in accordance with the instructions controlling a majority of the deposited
stock. A substantial controversy or issue shall be deemed to exist when so
determined by the depositor corporation, the trustee, or the New York Stock
Exchange, acting through any of its committees.
Distribution or investment of proceeds of eliminated property.—All amounts
received from eliminations and not available for reinvestment, with the excep
tion of fractional amounts, must be distributed within a reasonable time.
Extension of trust.— If the trust agreement grants any right of extension, the
fact must be stated in the offering circular.
Opinion of counsel.— Neither the depositor nor the trustee may be entitled to
rely in any matter affecting the holders of trust certificates upon the opinion
of counsel excepting in purely legal matters.
Continuing maintenance charges.— A reasonable method must be provided by
which continuing maintenance charges are to be met throughout the life of the
trust. If these charges are to be paid by the depositor corporation, reasonable
assurance of its ability to meet them must be given.
Regarding trust agreements formulated prior to the issuance of these re
quirements.—As to trust agreements formulated and in effect prior to the issu
ance of these requirements under conditions not permitting change, the com
mittee may make such reasonable adaptations as it may determine to be in
conformity with the general spirit and object hereof.
CONCERNING THE OFFERING CIRCULAR

Loadings, charges, and deductions.—The lading charges and other factors
entering into the aggregate load must be expressed so clearly that the investor
will be able to determine the relation between it and the value of the underly
ing property. For this purpose and for the purpose of the application, the
value of the underlying property shall consist of the actual market value of the
underlying securities, at the date of issuance of circular, or application, at not
more than odd-lot prices, determined in the manner customary on the New
York Stock Exchange, which, in the case of active listed stocks, would be deter
mined by adding the fraction normally charged by odd-lot houses to the actual
market transactions in the securities involved, or by using the asked price
without the addition of any fraction, plus commission at not to exceed, for
listed securities, the commissions prescribed by the constitution of the New
York Stock Exchange as the minimum which may be charged to nonmembers,
and for unlisted securities the commissions customarily payable on similar
transactions.
The following are among the factors which the committee consider elements in
the loadings, charges, and deductions:
(a)
A percentage for expenses and profits to be added to the value of the
underlying property as above defined. While distributable accretions form a
proper element for inclusion in the offering price, no loading percentage may
be added thereto, excepting so much, if any, as may be necessary to cover
approximate expense of distribution of proceeds of eliminations.
(&) Any periodical charge. This must be stated as a percentage of the cur
rent annual income, and may also be stated as a percentage of the value of the
underlying property as above defined. In determining the amount of current
annual income, there shall be included only cash dividends at the rate currently
payable, and interest receivable at current rates. If interest on any cash form
ing part of the deposited property or accumulations does not accrue to the
certificate holders, the amount of interest shall be deemed to be part of the
periodical charge.
(c)
Any charge which may be assessed against the trust certificate holder
at the time of surrender of his certificates and termination of the trust, whether
at the instance of such certificate holder or otherwise, under the terms of the
trust agreement.
Statement of the amount of loading.—The aggregate amount of the loading in
excess of the value of the underlying property as hereinbefore defined must be
stated in terms of percentage of such value at date of issuance of circular. The
aggregate amount of any periodical charges must be stated as a percentage of
the current annual income as hereinbefore defined. The amount of any termi

STOCK EXCHANGE PRACTICES

115

nation charge under any conditions must be stated as a percentage of the value
of the underlying property at da.te of issuance of circular.
Determination of offering price.— The offering price shall be the sum of—
(1) The market value as hereinbefore defined of the underlying property;
(2) the load described in paragraph (a) above; and (3) the amount of dis
tributable accretions.
In the case of certificates originally offered for $1 or less per certificate the
offering price may be increased to the next higher cent, if such sum. results in
a price per certificate which includes a fraction of 1 cent.
In the case of certificates originally offered for more than $1 and less than
$5 per certificate the offering price may be increased to the next higher twen
tieth of a dollar, if such sum results in a price per certificate which includes a
fraction of one-twentieth of a dollar.
In the case of certificates originally offered for $5 or more per certificate the
offering price may be increased to the next higher one-eighth of a dollar, if
such sum results in a price per certificate which includes a fraction of oneeighth of a dollar.
Elimination# and substitutions.—The offering circular shall have a clear
summary of the provisions covering elimination of the deposited securities, as
well as of all provisions providing for substitutions.
Reserve fund.— There must be a statement whether a reserve fund has been
deposited in addition to the deposited securities. If there is such a fund the
amount thereof per trust certificate outstanding at the time of issuance of the
circular must be stated together with a statement that this amount is subject
to fluctuation and that information as to the amount included in the price
eharged any purchaser will be given upon request.
Method of making distributions.— There must be a statement as to whether
the trust is of the cumulative, partial distribution, or maximum distribution
type, and the method in which stock dividends, rights, and split-ups will be
treated must be fully described.
Voting rights.—There must be a clear statement as to the manner and condi
tions upon which a trust certificate holder may exercise voting rights.
Past experience.— No statement or computation may be included tending
to reflect results, either as to market valuation or as to distributions, which
would have been obtained if an investment had been made in the securities
comprising the portfolio at any period prior to its creation. Any statement
or computation of this character for periods after the creation of the trust
in question must go back to the beginning of the trust, and must show the
result by years since such creation.
CONCERNING ADVERTISEMENTS

Advertisements containing any of the information usually included in the
offering circular must include no less than the following in substantially the
same form in which similar information is contained in offering circulars.
(1) Statement of the amount of loading.
(2) Statement of determination of offering price.
(3) Statement of periodic charges.
(4) Provisions in regard to eliminations and substitutions.
(5) Method of making distributions.
(6) Voting rights.
No statement which is considered objectionable in the circular may be in
cluded in the advertisement.
FURTHER DEFINITION OF POLICY

The foregoing statement of policy deals with the position of the committee in
reference to certain determinable facts. It would be easy to overemphasize
the relative importance of such facts. The composition of the portfolio of
underlying securities, for instance, or the nature of the elimination provisions,
may easily be the most important factors in the suitability of the trust for the
needs of a particular investor. The action of the committee, in determining
that the association of members of the exchange with any particular invest
ment trust is not objectionable, should in no event be construed as an expression
of opinion in regard to the intrinsic value of such trust or its desirability as
an investment.

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STOCK EXCHANGE PRACTICES
E x h ib it

No. 31,

A pril

21, 1932

(See p. 286, this hearing)
C e r t a in C ir c u l a r s R eg a r d in g A d v e r t is in g b t C o m m it t e e
duct, N e w Y ork S to ck E x ch a n g e

B u s in e s s C on

N e w Y o r k St o c k E x c h a n g e
COMMITTEE ON BUSINESS CONDUCT

N o v e m b e r 6, 1930.
To members of the exchange:
Many investment-trust agreements contain provisions to the effect that inter
est on dividends and other moneys received as part of the trust property is
not to be treated as part of the income accruing to the benefit of the holders
o f the investment-trust certificates.
The committee on business conduct rules that all members distributing the
■securities of such investment trusts must plainly state in all publicity matter,
Including advertisements, the fact that the beneficiaries of such trusts are
not entitled to such interest.
A s h b e l G r e e n , Secretary.
N e w Y o rk S to c k E x c h a n g e
COMMITTEE ON BUSINESS CONDUCT
N e w Y o r k , February 27,19SO.
To the members:
The rules of the exchange dealing with the forms of advertisements of
members are embraced in sections 1 and 2 of Chapter V III of the rules adopted
by the governing committee pursuant to the constitution and read as follows:
“ Section 1. No member shall publish an advertisement of other than a
strictly legitimate business character.
“ S eo . 2. Every advertisement of a member, unless it is in a general form
approved by the committee on business conduct, must, before publication,
receive the approval of said committee.”
You will note that it is provided that a proposed advertisement in a general
form that has been approved by the committee may be published without first
being submitted. It is the ruling of the committee on business conduct that,
subject to the policy with respect to listed securities which is outlined below,
the following types of advertisements come under this general description:
1. An ordinary business card;
2. A simple and direct offering of a particular security (which must be named
and not take the form of a so-called “ blind ” advertisement); and
3. A syndicate offering of securities of a corporation; provided, first, that the
security advertised is not that of a corporation in a prospective state; second,
that no prediction of any kind is made in the offering; third, that no statement
is made of what past earnings would have been under any assumed condi
tions that did not exist at the time; and, fourth, that no reference is made to
any contemplated application to list the security on this exchange.
In order to expedite the work of the committee on business conduct all pro
posed advertisements requiring approval before publication must be submitted
In duplicate, one copy to be retained by the committee for its files and the other
to be returned with its decision.
Policy of the committee on business conduct and of the committee of ar
rangements with respect to advertisements of listed securities, formulated
under section 3 of Chapter V III of the rules adopted by the governing com
mittee pursuant to the constitution, which reads as follows:
“ S bo . 3. Every advertisement of a member offering to make purchases or
sales of listed securities must, before publication, in addition to the approval
required by section 2, receive the approval of the committee of arrangements.”
Offerings may be advertised in securities assigned to the bond cabinets and
the inactive stock list. In such advertising the securities must be offered “ at
the market to yield about--------- per cent.”

STOCK EXCHANGE PRACTICES

117

Subject to the exception stated in the succeeding paragraph, active listed
stocks and bonds—i. e., those not classed as above—may be advertised by giving
their names without any accompanying text except the phrase “ Circular on
request,” to which may be added a description in general terms of the contents
of the circular provided the effect of the language used in the advertisement is
not to laud the affairs or prospects of the corporation concerned. This phrase
“ Circular on request ” must be employed in advertisements of bonds falling
under this heading. Inactive listed securities may, of course, be advertised in
the manner outlined for active listed stocks.
An exception to these rules is made, however, in the case of securities of
original issue, which may be advertised at a price by participants in the
syndicate during its existence. Scrip and fractional amounts of one share may
also be advertised at a price.
When rights are admitted to dealing they shall be treated on the same basis
as listed securities for advertising purposes.
Advertisements of the above character in which offerings are made must be
submitted to the committee on business conduct before publication.
When offerings are permitted, members must maintain the same market on
the floor of the exchange as they make over the counter.
A s h b e l G r e e n , Secretary.
N e w Y o bk Sto ck E x c h a n g e
COMMITTEE ON BUSINESS CONDUCT
N e w Y o b k , January 20, 1930.
To members of the exchange:
To avoid the possibility of violating the statutes of the various States affect
ing dealings in securities, the stock exchange can not overemphasize the im
portance of members completely informing themselves with regard thereto so
that they may stricty adhere to the regulations set forth in the pertinent laws of
each State in which they conduct business or advertise securities for sale.
A s h b e l G r e e n , Secretary.

N e w Y o bk S to ck E x c h a n g e
COMMITTEE ON BUSINESS CONDUCT
N e w Y o r k , September 12, 1929.
To members of the exchange:
In all cases where members of the exchange are contemplating organizing
and publicly offering the securities of an investment trust, the committee on
business conduct directs that the advertisement and circular and also a copy
of the charter and by-laws of the proposed corporation, and any management
or other similar contracts, be submitted to the committee in duplicate prior to
the date of offering. Inasmuch as the committee may require changes in these
documents before the advertisement of the issue is approved, all members con
templating the issue or offering of investment trust securities are urged to
submit their plan in detail to the committee at the earliest possible moment.
A s h b e l G r e e n , Secretary.
N e w Y o rk Sto ck E x c h a n g e
COMMITTEE ON QUOTATIONS AND COMMISSIONS
J u l y 29, 1929.
At a meeting of the committee on quotations and commissions held on July 18,
1929, the following regulations with respect to radio broadcasting were adopted:
1. Members desiring to broadcast quotations of this exchange by radio must
first receive written approval from the committee on quotations and commis
sions.
2. Permission may be given to more than one firm in the same city .
3. Permission to broadcast quotations of this exchange shall be limited to the
prices at the opening, 12 noon, and the closing, and such broadcasting of those

118

STOCK EXCHANGE PRACTICES

quotations shall be made only at 10.30 a. m., 12.30 p. m., and after the close,
respectively (New York time).
4. No market information or gossip may be broadcasted. This does not in
clude statements as to money rates and official announcements regarding action
by Federal reserve authorities, which must be quoted verbatim without inter
pretation or comment.
5. No announcement may be made further than the simple statement that the
quotations are supplied through the. courtesy of the firm furnishing them.
6. The committee shall be notified when the recipient of the privilege dis
continues the use thereof.
7. Permission to broadcast may be withdrawn by the committee at any time.
A s h b e l G eeejn, Secretary.
N ew Y ork S to ck E x ch a n g e
sejcbettary’ s o f f ic e

N e w Y o r k , June 22, 1928.
To the members of the exchange:
The attention of the members is called to the fact that, under a recent amend
ment to section 82 of the executive law of the State of New York, beginning
July 15 next and on the 15th day of each month thereafter, the department of
state at Albany is directed to publish a monthly bulletin to tbe known as the
State Advertising Bulletin which is to take the place of the publication formerly
known as the State Paper, which has been abolished.
All security dealers’ notices required to be filed under the so-called Martin
Act are, on and after July 15 next, to be filed with the department of state at
Albany for publication in the State Advertising Bulletin pursuant to an
amendment to article 23-a of the general business law.
Copies of the State Advertising Bulletin may be obtained without charge by
any person, by filing with the department of state at Albany before July 15 next,
a request that copies of said bulletin be mailed to such person.
A s h b e l G r e e n , Secretary.
N ew Y ork S to ck E x ch a n g e
OOMUm X E

o n b u s in e s s con d u ct

N e w Y o b k , January SO, 1928.
To the member*:
The committee on business conduct understands that a rule recently pro
mulgated by the New York Curb Market requires the submission to it of certain
types of advertising covering securities listed or admitted to unlisted trading
privileges thereon.
Where such an advertisement is of a character which must receive the
approval of the committee on business conduct of this exchange before publi
cation, the committee requests that the advertisement be first referred to the
New York Curb Market, and, if favorably acted upon, to this committee. The
letter to this committee which accompanies such an advertisement should carry
the statement that it has been approved by that institution.
E. Y. D. Cox, Secretary.
N ew Y

ork

S to ck E x ch a n g e

COMMITTEE ON BUSINESS CONDUCT

October 5, 1927.
To the members of the exchange:
The special attention of members is invited to the second paragraph of sec
tion 8 of Chapter X III of the rules adopted by the governing committee pur
suant to the constitution of the exchange, reading as follows:
“ No member shall make use of wireless to transmit or broadcast market
information or forecasts of business, or financial conditions or for any adver
tising purpose, or to stimulate interest in particular securities or in the
market: Provided, however, That members may supply quotations to broad

STOCK EXCHANGE PRACTICES

119

casting stations which have been approved by the committee on quotations and
commissions at such intervals and under such regulations as are prescribed by
said committee.”
Very truly yours,
E y D Cox< secretary.
N e w Y o rk Sto c k E xc h a n g e
COMMITTEE ON BUSINESS CONDUCT
N e w Y o r k , April 2$, 1921.
To the members:
Whenever a nonmember for whom you transact business contemplates giving
publicity to his business relation with you in an advertisement or any other
printed matter, the committee on business conduct directs that such advertise
ment or other printed matter be submitted to it by you before being used. Nonmembers having stationery coming within this category may continue to use
the same until the approval of the committee can be secured.
This rule should be brought to the attention of the nonmembers mentioned
above, and for this purpose additional copies of this circular can be obtained
at the secretary’s office.
E y D Cox 8ecretary,

N e w Y o rk Sto ck E x c h a n g e
COMMITTEE ON QUOTATIONS AN0 COMMISSIONS
M a r c h 2, 1925.
Hereafter any newspaper advertisements seeking the services of so-called
customers’ men or of managers or employees in the other offices of members
must be signed by the full name of the member or his firm.
By order of the committee on quotations and commissions.
E. V. D. Cox, Secretary.
N e w Y o rk Sto c k E x c h a n g e
COMMITTEE ON BUSINESS CONDUCT
N e w Y o r k , December 9,1924.
To members of the exchange:
Whenever a nonmember individual, firm, corporation, or association for whom
you transact business proposes to use your name in an advertisement, the
committee on business conduct requests that before you grant permission to the
nonmember to publish such advertisement it be submitted to the committee.
This request is, of course, as equally applicable to current advertising as to
fntnre advertising.
E y D ^
secretary.

N e w Y o rk S to c k E x c h a n g e
COMMITTEE ON BUSINESS CONDUCT
N e w Y o r k , November 21, 1922.
To the members:
Referring to Circular C -ll, issued by the committee on business conduct on
December 9, 1921, on the subject of advertising, in which syndicate offerings
of securities are designated as being in a general form not requiring submission
to the committee, the committee now amends this ruling to the extent that
syndicate advertisements of securities of a corporation still in a prospective
state shall be submitted to the committee before publication.
In the same circular members were advised that a simple and direct offering
of a particular security also need not be submitted for approval. Such an ad
vertisement, however, must always give the name of the security referred to, it
being the intention of the committee that so-called blind advertisements shall
not be published by members.
E. V. D. Cox, Secretary.

120

STOCK EXCHANGE PRACTICES

New

Y ork Stock E x ch an g e

COMMITTEE ON BUSINESS CONDUCT

March 20, 1922.
To the members:
The attention of the committee on business conduct has been called from time
to time to advertisements of nonmember correspondents of members that
involve New York Stock Exchange firms.
I am instructed to request that any advertising of your correspondents which
may include your name be subject to your supervision prior to publication.
Yours very truly,
E. V. D. Cox, Secretary.

New

Y ork S to ck E x ch a n g e

COMMITTEE ON BUSINESS CONDUCT
D e c e m b e r 9, 1921.
To the members:
I am instructed by the committee on business conduct to call to your atten
tion the following resolutions regarding advertising adopted by the governing
committee on November 23, 1921, to take effect December 15, 1921:
“ That the resolution of the governing committee of April 26, 1916, reading
as follows: ‘ That it is the opinion of the governing committee that, under the
resolution of February 9, 1898, no member, or his firm, is permitted to use
“ catch phrases ” or to depart in any way from direct and simple methods of
advertising,’ be rescinded, and that the following be adopted:
“ ‘ That no member of the exchange and no firm represented thereon shall
publish any advertisement unless either it is in a general form that has been
approved by the committee on business conduct or it has been submitted to said
committee and approved by it.’ ”
You will note that it is provided that a proposed advertisement in a general
form that has been approved by the committee may be published without first
being submitted. It is the opinion of the committee that at this time such
advertisements as syndicate offerings of securities or a simple and direct offering
of a particular security by a firm or individual, or ordinary business cards come
within this general description.
In order to expedite the work of the committee on business conduct, all other
proposed advertisements must be submitted in duplicate, one copy to be retained
by the committee for its files and the other to be returned with their decision.
E. V. D. Cox, Secretary.

E x h ib it

No. 32,

A fb il

21,1932

(See p. 286 of this hearing)
Illustrative instances of ownership of listed stocks by other companies the
stocks of which are also listed

Listed company

Owns shares of—

Andes Copper Mining
Co........................ .........
Chile Copper Co.............
Greene Cananea Copper
, Co...................................
E. I. DuPont de Nemours General Motors Corpo
& Co.
ration (common).
General Theatres Equip Fox Film Corporation
ment.
(class A ).
Pierce Oil Corporation_____ Pierce Petroleum Cor
poration.
Pierce Petroleum Corpora Sinclair
Consolidated
tion.
Oil Corporation (com
mon).
United Aircraft & Trans National Air Transport.
port Corporation.
Anaconda Copper Mining
Co.

Date

Number of Number of
shares
shares
Per cent
listed
owned

Apr. IS, 1032

[3,496,127
4,384,914
I 490,344

4,415,503
499,915

97.5
99.3
98.0

Dec. 31,1931

9,981,220

43,500,000

22.9

........ do.............

1,221,213

2,425,660

50.3

........ do.............

1,103,419}*

2,500,000

44.1

........do.............

645,834

6,103,373

10.6

A pr. 15,1932

634,782

650,000

97.6

121

STOCK EXCHANGE PRACTICES

Illustrative instances of ownership of listed stocks by other companies the stocks of
which are also listed— Continued
Number of Number of
shares
shares
Per cent
owned
listed

Listed company

Owns shares of—

Date

General Electric C o .............

Radio Corporation of
America (common).
International Paper &
Power Co.:
Class A .......................
Class B ____________
Class C .......................
Youngstown Sheet &
Tube Co.
Firestone Tire & Rub*
ber Co.
B. F. Goodrich & Co___
Goodyear Tire & Rub
ber Co.
Prairie Oil & Gas Co___
Prairie Pipe Line Co___
Tide Water Associated
Oil Co.
Pacific Telephone &
Telegraph Co.
Brooklyn & Q u e e n s
Transit Corporation
(reference, Fitch Man
ual).
(Detroit Edison Co..........
Pacific Gas & Electric
Co.
Public Service Corpora
tion of New Jersey.
The United Gas Im
provement Co. (com
mon).
Columbia Gas & Elec
tric Corporation (com
mon).
Commonwealth &
Southern Corporation
(common).
Consolidated Gas Co. of
. New York (common).
Pacific Gas & Electric__
Public Service Corpora
tion of New Jersey.

Dec. 31,1930

5,188,755

13,129,757

39.5

Dec. 31,1931
____ do_______
........ do.............
........ do.............

50,000
196,400
335,700
66,896

1,000,046
1,000,000
2,500,000
1,186,184

5.0
19.6
13.2
5.6

Continental shares (In c .)...

Petroleum Corporation of
America.
American Telephone &
Telegraph Co.
B r o o k ly n -M a n h a t t a n
Transit Corporation.

North American Co..............

United Corporation..............

Standard Gas & Electric Co.
United Gas Improvement
Co.

i Common.

2,250,000

6.9

........do.............
........ do.............

113,900
381,205

1,167,142
1,371,433

9.8
27.5

........do.............
........ do.............
........ do.............

583,700
555,600
323,000

2,441,432
4,050,000
5,998,086

23,9
13.7
5.4

........ do............. • 1,512,390
* 640,427
1 526,440
June 30,1930
2 145,460

1,805,000
820,000
800,000
288,250

83.79
78.1
64.2
50.4

Dec. 31,1931
3 240,163
........do............. 12,075,455

1,272,260
6,236,870

18.9
33.3

........ do.............

156,200

........do.............

988,271

5,503,193

17.9

........do.............

6,066,223

23,246,144

25.7

........ do.............

2,424,356

11,679,043

20.7

........do.............

1,798,270

33,978,340

5.3

........ do.............

203,900

11,476,527

1.7

Dec. 31,1930 1 2,145,000
Dec. 31,1931 i 2,017,490

6>236^870
5,503,193

34.3
36.7

* Preferred.

3 Capital.

Railroad stocks listed on New York Stock Exchange

Listed company

Owned company

Chesapeake Corporation
Erie Railroad Co............
Missouri Pacific R. R.
Co.
Alleghany Corporation___
— do...............................
New York, Chicago &
St. Louis R. R. Co.
Pere Marquette Ry. Co.
Pitteton Co.....................
Atlantic Coast Line R. R. Louisville & Nashville
Co.
R. R. Co. (common).
Reading Co. (common)
sference, Moody's
anual):
First preferred..........
Baltimore & Ohio R . R. Co.
Second preferred___
Western Maryland R.
R. (common).
Chesapeake & Ohio
Rwy. Co.
Chesapeake Corporation.... Pore Marquette Rwy.
Co.
Erie Railroad Co........... .

i Common.

Number of Number of
shares
shares
Per cent
owned
listed

Date

Dec. 31,1931
....... do---------....... do............

U,287,300
1215,000
>219,300

1,799,746
1,611,167
718,001

....... d o - .........
------ d o - .........

>634,600
•167,300

319,644

....... d o . . ____
____do............
Dec. 31,1930

146,200
1496,240
696.700

460,460
1,076,100
1.170.000

10.3
46.1
61.0

........ do.............

648.700

1.400.000

39.2

------ do............
------ do.......... .
------ do----------

231,266
330,800
169,060

660,000
840,000
630,668

41.3
39.3
30.0

Dec. 31,1931

4,094,008

7,666,020

53.4

------ do............

27,600

460,460

6.1

____do----------

69,000

1,611,167

4.6

Preferred.

70.4
14.2
30.6
64.6

122

STOCK EXCHANGE PRACTICES

Railroad stocks listed on New York Stock Exchange—Continued
Listed com pany

Owned company

Date

N ew York, New Haven Dec. 31,1930
& Hartford R. R . Co.
(com m on).
Pennsylvania R. R . Co
Pittsburgh, Fort W ayne ........d o ----------& Chicago R y. Co.
(com m on).
|Cleveland, Cincinnati,
Chicago & St* Louis
(reference
M o o d y ’s
M anual):
____ d o .............
____ d o _______
N ew Y ork Central Rail____ d o .............
N ew York & Harlem
R . R . Co. (com m on ).- ____ d o ......... .
Reading Co.:
____ d o _______
First preferred-........ ____ d o _______
Second preferred___ -------d o ----------N ew York, N ew Haven & N ew York, Ontario & Dec. 31,1931
Western R y. C o.
Hartford R . R . Co.
(com m on).
Baltimore & Ohio R . R.
C o.
(reference
M o o d y ’s Manual):
Dec. 31,1930
____ do_______
Illinois Central R . R .:
____ d o .............

N um ber of N um ber of
shares
P er cent
snares
listed
owned
265,025

1,571,186

16.8

757,620

868,128

87..3

462,645
85,166
186,081

470,288
100,000
187,364

98.4
85.1

111,988

172,773

64,8

262,900
136,800
300,300
291,600

1,400,000
560.000
840.000
1 581,139

18.7
24.4
35.7
60.1

62,670
18,059

2,563,021
600.000

2.4
3.0

247,500
69,750

1,357,978
186,453

18.2
37.4

____ d o . : _____

267,152

4,992,591

5. a

18,450

1,192,388

1.5.

____ d o .............

44,206

1,584,394

2. 8-

99. a

N ew York Central R . R.
Chicago,
Milwaukee,
St. Paul & Pacific
Chicago & Northwest-

i Comm on.

E x h ib it N o. 33, A p r il 21, 1932
(See p. 286 of this hearing)

123

STOCK EXCHANGE PRACTICES
E x h ib it

No. 34,

A pril

21, 1932

(See p. 287 of this hearing)
F orm s

C o n t r a c t s B e t w e e n C u s t o m e r s a n d F i r m s R e g iste r e d
Y o r k S t o c k E x c h a n g e C o v er in g M a r g in A c c o u n t s

on t h e

New

The eight forms of margin contracts hereinafter enumerated and attached
hereto have been collected at random by the New York Stock Exchange from
brokerage firms:
(a) Margin contract and stock loan authorization used by J. S. Bache & Co.
(&)
Margin contract and stock loan authorization used by Boettcher, Newton
& Co.
(o)
Margin contract and stock loan authorization used by Harris, Upham
& Co.
(<i) Margin contract and stock loan authorization used by Hemphill, Noyes
& Co.
(e) Margin contract and stock loan authorization used by Hornblower &
Weekes.
(f ) Margin contract and stock loan authorization used by Logan & Bryan
iff) Margin contract and stock loan authorization used by Paine, Webber
& Co.
(ft) Margin contract and stock loan authorization used by Shearson, Hammill & Co.
D ate__________ , 193__
J. S. Baches & Co.
G e n t l e m e n : I request you to open an account for me for the purchase and
sale and/or sale and purchase of property (as hereinafter defined), or to con
tinue to carry my present account, and I represent that I am of full age and
am not an employee of the New York Stock Exchange or any other exchange
or board nor of any member of any such exchange or board, nor of any bank,
trust company, banker, or insurance company, nor of any corporation, firm, or
individual engaged in the business of dealing, either as broker or as principal in
securities or commodities, nor is any such employee directly or indirectly inter
ested in my account, and in consideration of your opening or continuing said
account I hereby agree with you as follows:
The word “ property” as used herein shall include shares of stock, certifi
cates of shares of stock, scrip certificates, stock warrants or rights, and bonds,
notes, debentures, and other evidences of indebtedness, whether secured or un
secured, and the security therefor and other securities of every kind and nature,
and commodities and contracts for the future delivery of commodities and
all other property usually and customarily dealt in on exchanges, boards, or
markets, or by stock brokerage firms. The word “ equity ” as used herein shall
mean the amount by which the market value of all property carried in my
account shall exceed the amount of my debit balance or indebtedness, and also
any free credit balance that I may have with you.
All transactions for my account shall be subject to the rules and regula
tions of the exchange, board, or market, and the clearing house thereof, if any,
where executed by you or your agents, and subject to the customs and usages of
the stock-brokerage business. Only actual purchases and sales are contem
plated and intended.
Any and all property at any time held by you for my account and also my
equity shall be held by you as security for any and all my indebtedness to you,
however arising, and in whatever account appearing, and by whatever name or
symbol any such account may be designated, as well as for rpy contingent
liability to you by reason of any guaranty by me of accounts of others.
Whenever I am indebted to you, any and all property held or carried by you
in any account for me, either individually or jointly with others, may from
time to time and without notice to me, be carried in your general loans and
may be pledged, repledged, hypothecated, or rehypothecated or loaned by you
either to yourselves as brokers or to others, separately or together with other
property for more than the amount due you thereon and without having in your
possession or subject to your control for delivery property of the same kind and
amount, and you shall at no time be required to deliver to me the identical
property delivered to or purchased by you for my account but only property
of the same kind and amount.

124

STOCK EXCHANGE PRACTICES

At any time and from time to time, in your discretion, you may without
notice to me apply and/or transfer any or all my property or equity inter
changeably between any of my accounts or from any of my accounts to any
account guaranteed by me.
Whenever you shall deem it necessary for your protection you may sell from
time to time any property which you may carry for me either individually or
jointly with others, or you may buy from time to time for my account any
property of which I may be short, or you may enter from time to time stop-loss
orders against any property that I may be either long: or short, and from
time to time cancel, withdraw, or change any such stop-loss orders, or make
sales or purchases as the case may be at prevailing prices while stop-loss orders
are being carried, and any such sales or purchases may be made by you at
your discretion either on the exchange or board or other market where such
business is then usually transacted or at public or private sale, all without
prior demand for additional margin or security, and without prior tender, and
without any notice to me of the time or place of sale, all of which are hereby
expressly waived. I expressly agree to pay any and all costs and expenses of
any such sales or purchases and also to pay any deficiency that may remain
thereafter.
No demand, call, tender, or notice which you may make or give in any one
or more instances, nor any failure on your part to insist at any time, upon
strict compliance herewith, nor any continued course of such conduct on your
part, shall in any event constitute or be considered a waiver by you of any of
your rights or priveleges hereunder.
My account and this agreement and all your rights hereunder may be trans
ferred by you to any successor firm that takes over and continues your busi
ness, and all your rights and privileges hereunder shall continue in the event
of my death or insanity, and this agreement and its enforcement shall be
governed by the laws of the State of New Tork, and any controversies arising
between us shall be determined by arbitration pursuant to the arbitration law
of the State of New Tork, and if we can not agree on an arbitrator, then he
shall be appointed by the arbitration committee of the New York Stock Ex
change, or if they should fail or refuse to do so, then as provided in said arbi
tration law of the State of New York.
Signature_____________________
Witness _____________________
A tt th o b izatio n

J . S. B a c h e & Co.

D ated__________ _ 193— .
J . S. B a c h e & Co.
G e n t l e m e n : The undersigned hereby expressly authorizes you to lend either

to yourselves for account of other of your customers or to others at any time
or from time to time any or all securities now or at any time hereafter held
on margin by you for the account of the undersigned. This authorization may
be revoked by the undersigned at any time by reasonable notice in writing.
Yours very truly,

A greem ent

C u stom er

w it h

B o e t t c h e r -N e w t o n & Co.

In consideration of Boettcher-Newton & Co. acting as brokers for the under
signed, it is hereby agreed between them as follows:
First, That all transactions shall be subject to the rules and customs of the
exchange or market and its clearing house, if any, on which the same are
executed.
Second. That Boettcher-Newton & Co. may, at any time without notice thereof
to the undersigned, pledge, repledge, hypothecate, or rehypothecate, either sepa
rately or with other securities, for the amount due thereon or for a greater
amount, any or all of the stocks, bonds, or evidences of debt carried for the
account of the undersigned or deposited to secure the same, on which BoettcherNewton & Co. have a lien, without having in their possession or subject to their
control stocks, bonds, or other evidences of debt of the kind and amount to
which the undersigned is then entitled.

STOCK EXCHANGE PRACTICES

125

Third. That whenever the obligations or indebtedness of the undersigned to
Boettcher-Newton & Co. shall not be secured to their satisfaction, they may,
without notice or demand for margin to the undersigned, sell at any stock
exchange or broker’s board or at public or private sale or auction, without
advertising, any or all securities they hold therefor, and/or Boettcher-Newton
& Co. may cover by purchase any short sale made for the account of the under
signed, it being agreed that a prior demand or call or a prior notice of the
time and place of such sale or purchase shall not be considered a waiver of the
right of Boettcher-Newton & Co. to sell or purchase as herein provided without
notice or demand to the undersigned.
Fourth. That the monthly debit balance of the account of the undersigned be
charged with interest at the average rate for loans of Boettcher-Newton & Co.
during the month covered by such balances, plus any special rate they may have
to pay thereon, together with a charge to cover the credit service and facilities
afforded the undersigned by Boettcher-Newton & Co.
Fifth. That all notices or communications from Boettcher-Newton & Co. to
the undersigned shall be sent to the address herein designated until BoettcherNewton & Co. receives notice from the undersigned by registered mail that such
address has been changed, and that the delivery of notices and communications
at such address or such changed address shall be deemed personal delivery
thereof to the undersigned.
Sixth. That in all transactions wherein Boettcher-Newton & Co. acts as
brokers for the undersigned the undersigned will save Boettcher-Newton & Co.
free and harmless from any loss, damage, or liability that may arise out of
such transactions, howsoever the same may occur.
Seventh. That this agreement shall continue until revoked by the undersigned
in writing and shall be binding upon and inure to the benefit of BoettcherNewton & Co. and the undersigned and their respective successors, executors,
administrators, and assigns, and that a revocation of this agreement by the
undersigned shall not affect transactions made prior to the receipt by BoettcherNewton & Co. of written notice of such revocation.
Eighth. The undersigned hereby represents that he/she is not connected as a
clerk or employee with the New York Stock Exchange or any other exchange or
with a member of that exchange or any other exchange, and that he/she is not
connected as a clerk or employee with any bank, trust company, insurance
company, bankers, or with any broker, corporation, or firm engaged in the
business of dealing in securities or commodities.
Name ________ ____________ _ ,
Address____________________ _
Approved by Boettcher-Newton & Co.
Accepted b y ______________________

D e a r Sib(s)

New Yobk C i t y .
M a d a m : As a customer of this firm with whom we have

entered into a customer’s agreement permitting us to loan securities purchased
on margin for you, we desire to call to your attention a resolution adopted on
February 18, 1932, by the governing committee of the New York Stock Ex
change, as follows:
“ Whereas it has been stated that customers in some instances do not appre
ciate that the usual form of customer’s agreement permits brokers to lend
securities purchased on margin, and it has also been stated that some customers
are not aware of the fact that they have the right to revoke any authorization
to lend securities which they may have previously given to their brokers; it was
“ Resolved, That members of the exchange shall not, on and after April 1,1932,
lend, either to themselves as brokers or to others, securities held on margin
for customers unless they shall have obtained separate authorization in writing
permitting the lending of such securities; it was further
“ Resolved, That no general form of customer’s agreement, even though it
includes specifically the right to lend securities, shall be deemed sufficient com
pliance with this resolution, but such right shall be evidenced by a separate
authorization in writing; it was further
“ Resolved, That in the case of the accounts of all new customers opened after
date hereof the requirement of such separate authorization in writing for the
lending of securities shall apply; and it was further
“ Resolved, That the committee on business conduct may, at its discretion, re
quire that members shall at stated periods bring to the attention of all cus 1 1 9 8 3 2 — 3 3 —

a p p .—

:— 9

126

STOCK EXCHANGE PRACTICES

tomers their right to revoke any authorization theretofore given for the lend*
lug of securities.”
In accordance with the letter and spirit of this resolution we are attaching
herewith a form of authorization which we request that you please read care
fully and, if you approve, kindly sign the same and return it to us promptly.
Yours very truly,
B o e tto h e r -N e w t o n & Co.
s p e c i a l a u t h o r iz a t io n to l o a n s e c u r i t i e s

B o e t t c h e r , N e w t o n & Co., New York, N. Y.

D ear S irs : Confirming the written authorization and consent previously given
you in the "customer’s agreement” heretofore made with you, until you re
ceive contrary notice in writing from the undersigned, you are hereby specifically
authorized, from time to time, to loan, either separately or with other securi
ties, to yourself or to such other persons, firms, or corporations, including (but
without limiting the foregoing) banks or trust companies as you may de
termine in your discretion, any securities held by you or in your possession as
margin or collateral for the account of the undersigned.
Yours very truly,
N am e____________ __
SPECIAL AUTHORIZATION TO LOAN SECURITIES
D a te__________ _ 193—
B o e tto h e r -N e w t o n & Co., New York, N. 7 .

D ear S irs : Until you receive contrary notice in writing from the undersigned
you are hereby specifically authorized, from time to time, to loan either separately
or with other securities, to yourself or to such other persons, firms, or corpora
tions, including (but without limiting the foregoing) banks or trust companies
as you may determine in your discretion, any securities held by you or in your
possession as margin or collateral for the account of the undersigned.
Yours very truly,
Name _______________ - ___ _
Address ___________________
Telephone N o .____________
Customer’ s A greement
H arris, Upham & Co.:
D ear S ir: In respect to all accounts which the undersigned now has, or may
hereafter have with you or your successors (hereinafter referred to as you)
for the purchase or sale of securities or commodities, or contracts for com
modities or securities, including any account as guarantor, it is understood and
agreed as follows:
Only actual purchases or sales are contemplated, and all orders shall be exe
cuted subject in all respects to the regulations and usages of the New York
Stock Exchange or other exchange or market where executed; and you and
your correspondents are hereby constituted agents of the undersigned for the
purpose of consummating all such transactions, and are authorized to make
such advances and expend such moneys as may be required in respect thereof.
All securities or commodities, or contracts for commodities or securities, now
held or hereafter purchased by you for, or now or hereafter deposited with you
by, the undersigned, are to be held by you as security for all liabilities of the
undersigned to you, however and whenever arising, and you are hereby author
ized, without further notice to the undersigned, and without regard to whether
you have in your possession or subject to your control at the time thereof other
securities, commodities, or contracts for commodities or securities of the same
kind and amount, in the usual course of business to repledge, rehypothecate
(either for the amount due you from the undersigned, or for a greater sum)
and loan the same from time to time separately or together with other securities
either generally or to or for account of your other customers; and you shall
not be required to deliver to the undersigned the same certificates or securities

STOCK EXCHANGE PRACTICES

127

deposited or received but only certificates or securities of the same kind and
amount.
You may from time to time demand additional security or that any account
be immediately taken up and paid, and all amounts advanced and other balances
due, with interest at the current rate, and all commissions fixed by the regula
tions and usages of the exchange or market where orders are executed shall
be due and payable upon demand.
You may employ subbrokers and shall be responsible only for reasonable care
in their selection, and may settle contracts and controversies according to the
regulations and customs of the exchange or market where orders are executed.
Upon failure of the undersigned to comply with any of the provisions hereof,
or whenever deemed necessary for your protection, you are hereby authorized
and empowered to sell, assign, and deliver all or any part of the securities,
commodities, or contracts for commodities or securities pledged hereunder upon
any exchange or market or at any public or private sale, at your option, and/or
to purchase to cover short sales and without demand for margin, and without
advertisement or notice of purchase or sale, which are hereby expressly waived,
and no specific demand or notice shall invalidate this waiver; and after deduct
ing all costs and expenses of purchase or of sale and delivery, including com
missions, transfer and stamp taxes, to apply the residue of the proceeds to the
payment of the liabilities of the undersigned to you, returning the surplus, if
any, to the undersigned; and upon any sale other than a private sale you may
purchase the whole or any part thereof free from any right of redemption, and
the undersigned shall remain liable for any deficiency.
All statements of account rendered the undersigned from time to time shall
be taken to be correct unless written notice to the contrary is given you within
10 days after the receipt thereof.
All statements of account, notices, or demands hereunder may be made by
depositing the same* in writing in the United States mails directed to the
undersigned at the address given below, or any other address of the undersigned.
Notices and demands may, however, be given by you by any other means of
communications.
Monthly debit balances on accounts shall be charged in accordance with your
usual custom with interest at a rate which shall include the average rate paid
by you on your general loans during the month covered by such balances respec
tively, and any extra rates caused by market stringency, together with a charge
to cover your credit service and facilities.
In all transactions wherein you act as the undersigned’s agent, the under
signed agrees to wholly indemnify and save you free and harmless from any
loss, damage, or liability arising out of such transaction howsoever same may
occur and the undersigned agrees promptly to pay on demand any loss or debit
balance arising in any account of the undersigned.
Whenever you shall elect to give undersigned notice of intention to liquidate
his account giving time and place where sale is to occur, no oral agreement on
the part of any of your agents agreeing to adjournment shall be binding; all
such agreements must be in writing.
This agreement shall pertain to all accounts including accounts from time to
time closed and then reopened and shall continue until revoked by the under
signed in writing, such revocation to affect only transactions thereafter entered
Into between us.
The undersigned hereby represents that he is of full age and sound mind;
that he is not connected as a clerk or employee with the New York Stock Ex
change or any other exchange, nor with a member of that exchange or any other
exchange engaged in the business of dealing in securities or commodities, nor
is he connected as a clerk or employee with any bank, trust company, banker, or
insurance company, nor with any broker, firm, or corporation engaged in the
business of dealing in securities or commodities.1
Yours truly,
Name_______________________________
Address-------------------------------------------Dated _______________________________
In the presence o f -----------------------------* This clause is part of the agreement only in the case of individual customers.

128

STOCK EXCHANGE PRACTICES
A t jt h o b it y

L oan

Date_________.___________

H a r r is , U p h a m & Go.

G e n t l e m e n : I hereby reaffirm the consent heretofore given by me authorizing
you to lend, to yourselves as brokers, or to others, any securities which you
may be carrying for my account or under my control on margin.
This authorization shall apply to any and all accounts carried by you for
me or under my control, and shall remain in force until revoked by me by a
written notice, addressed to you and delivered at your office.

A u t h o r it y

L oan

D ate_____________________
H a r r is , U p h a m & Go.
G e n t l e m e n : You and your successors (hereinafter referred to as you) are
hereby authorized without further notice to loan from time to time securities
that may be held by you in the undersigned’s accounts, either generally or to
or for account of your other customers.
This authority shall apply to all accounts under undersigned’s control and
shall be revocable at any time by written notice addressed and delivered to
you at your office.
Very truly yours,

F orm

M a r g in A g r e e m e n t , S e p t e m b e r , 1930

D a te-------------------------------H em ph ill, N oyes & Co.,
15 Broad Street, New York.
D e a r S i r s : All transactions in any account which the undersigned now has or
may hereafter have with you, your successors and/or assigns, shall be upon the
following terms and conditions:
All orders shall be subject to the regulations and usages of the exchange or
market and its clearing house, if any, where such orders are to be executed, and
you may settle contracts and controversies according to such regulations and
usages.
All securities or commodities or contracts therefor now held or which at any
time hereafter may be purchased for the undersigned and/or held by you and/or
deposited with you for protection or safekeeping by the undersigned, may be
held by you as security for the payment of all obligations and liabilities of the
undersigned to you however and whenever arising. You are hereby authorized,
whenever the undersigned shall be indebted to you or have a short position with
you, without any notice to the undersigned, and irrespective of whether or not
you have in your possession or subject to your control other securities, com
modities, or contracts therefore of the same kind and amount, to pledge,
repledge, rehypothecate, and lend or otherwise dispose of the same, either for
the amount owing to you or for a greater sum, separately or together with other
securities, commodities, or contracts therefor, and you are not required to
deliver the same securities, commodities, or contracts deposited with you, or
received by you but only the same kind and amount.
Whenever in your discretion you deem it desirable for your protection, you
are hereby authorized and empowered to sell, buy, assign, and deliver or receive
all or any of the securities, commodities, or contracts therefor, or any inter
est therein pledged with you or otherwise held long or short by you for the
undersigned upon any exchange or market, upon any public or private sale, and
to purchase securities or commodities to cover short sales or time contracts
made on behalf of the undersigned, all without any demand for margin, adver
tisement, or notice (demand, advertisement, and notice being hereby expressly
waived). You may make demand for margin or give notice for any purchase
or sale or may establish the practice of giving such demand or notice without
waving any right thereafter to sell or purchase such securities without such
demand or notice.

STOCK EXCHANGE PRACTICES

129

You may employ subbrokers and/or subagents, and you shall be responsible
only for reasonable care in their selection.
The undersigned’s debit balances shall be charged at the end of each month
with interest at the rate currently charged by you (which may be the same as
the rate charged to you by any bank for call loans); together with all carrying
and other charges at your current rates.
Upon demand the undersigned will immediately pay the entire amount (or
such part of it as may be demanded by you) of all obligations and liabilities
owing to you, together with interest and customary commissions.
Any statement of account rendered by you to the undersigned shall be binding
upon the undersigned unless written notice to the contrary within 10 days after
the receipt by the undersigned of such statement of account shall have been
given by the undersigned to you.
All notices or demands hereunder may be made by depositing the same in
writing in the United States mail, directed to undersigned at the address given
below.
No amendment of this agreement shall be in any way binding upon you unless
and until the same shall be reduced to writing and signed by a general partner
of your firm.
------------------------------------ (L. S.)
W itness
D a te _____________________
H e m p h il l , N o y e s & Co.,

15 Broad Street, New York City.
: You and your successors are hereby authorized to loan to your
selves as brokers or to others any and all securities which are now held or
which may hereafter be held in my margin account or accounts with or in any
such margin account or accounts controlled by me.
This authorization shall remain in force until revoked by me by written
notice addressed to you and delivered at your office, 15 Broad Street, New York
City, my margin agreement or agreements with you to remain otherwise in full
force and effect.
Very truly yours,
G e n tle m e n

Da
H

obnblower

& W

t e

____________________________

eeks.

G e n t l e m e n : I desire to arrange with you to act as brokers for me* in the
purchase and sale of securities from time to time. In view of the fact that I
may not at all times when I give orders wish to pay in full for securities which
you may purchase for me, or immediately to deliver certificates for the securi
ties which you may sell for me, I request the assistance of your credit in mak
ing payments for purchases and in the delivery of securities which I order sold;
and to that end I desire to open a credit account with you.
In consideration of your undertaking these proposed transactions and open
ing the account in which they will be recorded, I agree as follows:
1. My orders are to be executed in accordance with and subject to the rules,
regulations, and customs now and/or hereafter existing of the exchange or
other market in which the order is carried out. Orders may be executed through
a buyer’s or seller’s contract.
In case of sales of securities by my order and failure to furnish certificates in
time for delivery to the purchaser under the rules of the exchange or market,
I authorize you to make such delivery of securities for me, either from securities
which you may own or control or may borrow for the purpose. I agree to fur
nish such securities to you upon demand, but whenever you deem it necessary
or expedient for your protection you are empowered to purchase the same with
out notice to or demand upon me and to charge the cost thereof to my account.
2. All securities either purchased or deposited for my account may be used by
you either as collateral for your own loans or in making loans or deliveries of
securities to others, and without regard to the amount of my indebtedness to
you at the date of such use.

130

STOCK EXCHANGE PRACTICES

3. I will at all times maintain with you, in cash and/or securities readily
marketable on the Boston, New York, or Chicago stock exchanges, a margin of
value satisfactory to you above the amount of my indebtedness.
4. Whenever, in your judgment, you may deem it necessary or expedient,
you may sell at public or private sale without advertisement or notice to or
demand upon me, which are expressly waived, all or any part of the securities
carried in my account, whether purchased by you or deposited for my account,
and deliver to purchasers securities which have been sold for me, in order
thus to reduce and/or extinguish my indebtedness to you; and thereupon I will
promptly pay any balance due you. No specific demand or notice shall
invalidate or suspend this waiver.
5. You are hereby authorized to sell at any time without previous notice to
me, irrespective of the condition of my account, any and all fractional shares of
stock or rights to subscribe for fractional shares of stocks or bonds in my
account, or to which I may be entitled, whether represented by certificates or
scrip, crediting my account with the net proceeds of any such sale or sales.
6. My obligations as hereinbefore stated may be considered as applying to
every transaction and account I may have with you on or after this date, and I
agree that I will reimburse you for any loss which you may incur or suffer
by reason of any failure on my part to carry out any of my obligations to you.
7. I will promptly notify you of any error I may observe in respect of items
in your monthly statements or confirmations of purchase and/or sale for my
account, or any criticism thereof or objection thereto, and in the absence of
such notice you may assume that I accept them as correct.
I am of full age; I am not a clerk or employee of any stock exchange or of a
member thereof, or of any bank, trust company, banker, or insurance company,
pr of any broker, firm, or corporation engaged in the business of dealing in
securities or commodities.
Notices or other communications may be sent to me at the address given below
until such address is changed by notice by registered m ail; and the delivery
of all notices or other communications at said address shall be deemed personal
delivery thereof to me.
Very truly yours,
Signature_______________________________
Address________________________________
D a te _____________________
H

ornh low br

& W

eeks.

G e n t l e m e n : I have heretofore (in your customer’s agreement form) author
ized you to pledge or to lend all securities in my account with you.
To facilitate your compliance with resolutions adopted by the governing committee’of the New York Stock Exchange on February 18, 1932,1 now separately
authorize you to lend, either to yourselves as brokers or to others, all securities
held by you for my account on margin.
This authorization shall continue in full force until revoked by me in
writing.
Very truly yours,
Signature_______________________________
Address ________________________________

D ate------------------------------L ogan & B r y a n ,

New Yorh-Chicago.
G e n t l e m e n : In connection with all transactions heretofore had or hereafter
to be had with you the undersigned expressly agrees:
(1) That all such transactions shall be controlled by and subject to the laws,
rules, regulations, customs, methods of handling, clearing, interest charges, and
service charges prevailing on, allowed by, or applicable to the exchange or
market and any clearing house thereof and the place where such transactions
respectively are performed or executed, notwithstanding the law or practice
of the place where the undersigned resides or an order is given.
(2) That any securities or property heretofore or hereafter deposited or car
ried in the undersigned’s account with you may be shipped to New York City
or any other place, transferred to your name or that of any nominee of yours,

STOCK EXCHANGE PRACTICES

131

loaned by you, or pledged by you either separately or together with other se*
curities or property without reference to the amount, if any, owing by the
undersigned to you; that you may make such loans or pledges without having in
your possession or subject to your control any other securities or property of
the same kind; that you shall have a reasonable time after demand to deliver
any securities or property to which the undersigned is entitled, and you shall
not be required to return the identical securities or property deposited or car
ried, securities or property of like kind being sufficient.
(3) That you may at any time or times close any or all trades or transactions
which you are or at any time or times shall be carrying for the undersigned,
and/or sell any or all commodities or securities which you are or shall be carry
ing for the undersigned, and/or buy any commodities or securities which the
undersigned shall at any time or times be short with or through you. All such
closings, purchases, and/or sales may be made on any exchange or at public or
private sale without any advertisement, tender, notice to, or demand of any
kind upon the undersigned or anyone else.
(4) All notices, statements, reports, and/or other communications mailed to
the undersigned at any address given on the reverse side hereof, or left at any
such address, shall be deemed for all purposes to have been personally delivered
to the undersigned.
(5) This agreement applies to all accounts which the undersigned now has or
may at any time or times hereafter have with any firm of Logan & Bryan as
now or at any time hereafter constituted, or with any successor firm.
Full name_______________________________
Witness ________________________________

Custom er’s A gbeem ent
L ogan & B r y a n .
G e n t l e m e n : I (we) hereby reaffirm the consent heretofore given by me (us)
authorizing you to lend, to yourselves as brokers, or to others, any securities
which you may be carrying for my (our) account or under my (our) control
on margin.
This authorization shall apply to any and all accounts carried by you for me
(us) or under my (our) control, and shall remain in force until revoked by
me (us) by a written notice, addressed to you and delivered at your office
a t ______________________
Full name_______________________________ _
D ated-------------------------------(This form to be used only when customer has executed usual customer’s
agreement.)

B r o k er -C ustom eib C o n t r a c t

So long as the relation of broker and customer exists between Paine, Webber
& Co. (herein designated as the broker), and the undersigned (herein desig
nated as the customer), this contract shall control their rights, unless altered
or modified in writing.
1. All transactions shall be subject to the rules and customs of the exchange
where such transactions are consummated, and the clearing house of such
exchange.
2. All securities and commodities now or hereafter carried in the customer’s
account or deposited to protect the same, or held by the broker for him, may
be loaned or pledged by the broker, either separately or together with securities
belonging to others, irrespective of any amount being due thereon, or for more
than the amount due thereon, without further notice; and the broker shall
not be required to deliver to the customer the identical securities or com
modities carried in his account or deposited or held by the broker for him, but
only securities or commodities of the same kind or amount.
3. The customer obligates himself to see that at all times his account is in
such condition that, measured by the last publicly reported or recorded sale,
the aggregate value of the securities and/or commodity contracts being carried
by the broker for him, shall exceed by 10 per cent his debit balance. Should
he fail to do so, the broker may, without notice to or demand of the customer, at

132

STOCK EXCHANGE PRACTICES

Its discretion, sell all or a n y of the securities or commodities, or buy any secU'
rities or commodities to cover any of the customer’s commitments, at public
or private sale, for the credit of or to be debited against his account
4. The broker has the exclusive right to determine the amount of margin
required and (except as provided in par. 3 hereof) agrees that the securi
ties and/or commodity contracts will not be sold unless the customer
fails, within 24 hours after demand, to comply therewith, in which event the
broker may sell same without further demand or notice. If such demand be
made by letter or telegram, the time is to be reckoned from the hour the letter
is mailed or the telegram delivered to the telegraph company. The risk of
delay or nondelivery is assumed by the customer and the address given below
is to be treated as the customer’s address unless the customer shall advise the
broker of a change in his address by registered mail or telegram.
5. The broker agrees to mail to the customer a memo of each and every trade
made for him and the customer agrees that unless within five days after the
broker has mailed such memo he makes objection thereto, by registered mail,
be must be treated as adopting same. Monthly statements will be mailed to
the customer, who agrees to take exception thereto, by registered mail, within
five days after same is mailed; otherwise it shall be treated as an account
stated.
0.
It is expressly agreed that any controversy with respect to any liability
by reason of anything done or left undone by either party in connection with,
or in the purchase or sale of, securities and/or commodity contracts, or any
claim that either party has acted wrongfully or without authority, or that
either is indebted to the other, shall be settled by and pursuant to what is
known as the arbitration law, being chapter 72 of the Consolidated Laws of
New York, and in no other form or manner.
7.
The customer understands that no one of the agents or employees of the
broker is authorized or empowered to change this contract, nor to make promises
or assurances inconsistent herewith. This contract shall be binding upon and
inure to the benefit of the customer and his estate and the broker, its suc
cessors and assigns, and shall not be affected or modified by any practice or
specific demand or notice or otherwise, except by an agreement in writing ex
pressly purporting so to modify this contract, signed by a member of the broker’s
firm and the customer, and shall continue until revoked by the customer in
writing, such revocation to affect only transactions thereafter entered into.
Customer______________________
Address_____________________ _
Date______________________
Accepted, Paine, Webber & Co.
B E s o n m o N S A dopted

b y th e

G o v er n o r s

of t h e

N ow Y ork Sto ck E xoh anq b

Whereas it has been stated that customers in some instances do not appre
ciate that the usual form of customer’s agreement permits brokers to lend
securities purchased on margin, and it has also been stated that some cus
tomers are not aware of the fact that they have the right to revoke any
authorization io lend securities which they may have previously given to their
brokers; it was
Resolved, That members of the exchange shall not, on and after April 1,
1832, lend, either to themselves as brokers or to others, securities held on
margin for customers unless they shall have obtained separate authorization
in writing permitting the lending of such securities; it was further
Resolved, That no general form of customer’s agreement, even though it
includes specifically the right to lend securities, shall be deemed sufficient com
pliance with this resolution, but such right shall be evidenced by a separate
authorization in writing; it was further.
Resolved, That in the case of the accounts of all new customers opened after
the date hereof the requirement of such separate authorization in writing for
the lending of securities shall apply; and it was further
Resolved, That the committee on business conduct may, at its discretion,
require that members shall at stated periods bring to the attention of all
customers their right to revoke any authorization theretofore given for the
lending of securities.
D bab Sib : Above is a transcript of resolutions adopted by the governing
committee of the stock exchange at a meeting held on February 18, 1932, relat

133

STOCK EXCHANGE PRACTICES

ing to the loaning of customers’ securities. By your agreement with us yota
have heretofore authorized us to loan your securities. If you wish to continue
the authorization, will you kindly sign the agreement below and send it to us.
This authorization may be terminated by you in writing at any time.
P a i n e , W e b b e b & Go.
T o -------------------- .
AGREEMENT

Between Paine, Webber & Co. and__________________________________________
G e n t l e m e n : I hereby reaffirm the consent heretofore given by me authoriz
ing you to lend, to yourselves as brokers or to others, any securities which you
may be carrying for my account or under my control on margin.
This authorization shall apply to any and all accounts carried by you for
me or under my control and shall remain in force until revoked by me by a
written notice addressed to you and delivered at your office a t-------------------------Very truly yours,
Name____________________ _
Address____________________ _
Telephone------------------------------- Dated__________ _
FORM A

__rrr” _7-7i93__.
Messrs.

& Co.,
71 Broadway, New York City.
G e n t l e m e n : Consent is hereby given that all securities now carried or that
may be carried on !margin by Shearson, Hammill & Co. for account and risk
of the undersigned and any securities deposited or that may be deposited to
protect said margin account, may be pledged by said Shearson, Hammill & Co.
either separately or together with other securities either for the sum due thereon
to said Shearson, Hammill & Co. or for any greater sum, all without any fur
ther notice.
Very truly yours,
S h ea b so n , H a m m ill

CONSENT TO LOAN SECURITIES

Messrs.

& Co.,
71 Broadway, New York City.
G e n t l e m e n : Consent is hereby given that all securities now carried or that
may be carried on margin by Shearson, Hammill & Co. for the account and
risk of the undersigned and any securities that have been or may be deposited
to protect said margin account, may be loaned by said Shearson, Hammill &
Co. either to themselves as brokers or to other brokers until this consent is
rescinded by the undersigned in writing.
Very truly yours,
S h e a r so n , H a m m ill

E x h ib it

No. 35,

A pril

21, 1932

(See p. 287, this hearing)
F orms

G e n er al Collateral A

greem ents

The eight forms of general collateral agreements hereinafter enumerated and
attached hereto have been collected at random by the New York Stock Exchange
from corporations engaged in banking in New York City:
(а) General collateral agreement used by Bankers Trust Co.;
(б) General collateral agreement used by Central Hanover Bank & Trust
Co.;
(o) General collateral agreement used by Guaranty Trust Co. of New York.

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STOCK EXCHANGE PRACTICES

(d) General collateral agreement used by Irving Trust Co.;
(e) General collateral agreement used by Manufacturers Trust Co.;
(f) General collateral agreement used by The Chase National Bank of the
city of New York;
(fir) General collateral agreement used by the National City Bank of New
York; and
(h) General collateral agreement used by The New York Trust Co.
(a )

LIABILITY AGREEMENT

Know all men by these presents, that the undersigned, in consideration of
financial accommodations given or to be given or continued to the undersigned
by or through Bankers Trust Co., of the city of New York (hereinafter, whether
referred to as agent or otherwise, being called the company), hereby agrees
with the company, for its own account and as agent for every other person to
whom, and firm or corporation, to which the undersigned is or may become
indebted by reason of any transaction through the company as such agent or
by reason of any assignment by the company of all or any part of any indebt
edness of the undersigned, that whenever the undersigned shall become or
remain directly or contingently so indebted in any manner whatsoever, the
company shall then and thereafter, for its own account and as agent for each
such other creditor, have the following rights in addition to those created by the
circumstances from which such indebtedness may arise, against the under
signed or the executors, administrators, successors, and assigns of the under
signed, namely:
1. All securities now or hereafter deposited by or for the account of the
undersigned with the company as collateral to any such loan or indebtedness
of the undersigned to the company and/or other creditor, shall also be held by
the company as security for any other such liability or liabilities of the under
signed, whether then existing or thereafter contracted or existing, due or to
become due, or held to be held by the company for its own account and/or
as agent, and the company shall also have a lien upon any balance of the deposit
account of the undersigned with the company existing from time to time, and
upon all property and securities of every description now or hereafter given
unto, or left in the possession or custody of the company for safekeeping or
otherwise, by or for the account of the undersigned or in which the undersigned
may have any interest (all remittances and property to be deemed left with
the company as soon as put in transit to it by mail or carrier) as security for
any such liability or liabilities.
2. The undersigned shall deliver to the company additidonal collateral satis
factory to it whenever called for by it, so that there will at all times be with
the company a margin of security satisfactory to it for all such liabilities of
the undersigned now existing or which may hereafter be contracted or existing,
due or to become due, or held or to be held by the company for its own
account and/or as agent, and in case of failure so to do forthwith all such
liabilities of the undersigned shall become at once due and payable at the
option of the company, notwithstanding any credit or time allowed to the
undersigned by any instrument evidencing any of said liabilities or otherwise.
3. The company is hereby authorized and empowered at its option at any time
and from time to time to appropriate and apply to the payment and extinguish
ment of any such liabilities of the undersigned, whether now existing or
hereafter contracted, any and all moneys or other property or proceeds thereof
now or hereafter in the hands of the company on deposit or otherwise, for
the account of, to the credit of, oar belonging to the undersigned, whether such
liabilities are then due or not due. In the event of the insolvency of, or the
appointment of a receiver of the property of, or an assignment for the benefit
of creditors of, the undersigned, or the filing by the undersigned of a voluntary
petition in bankruptcy, or the filing of an involuntary petition in bankruptcy
against the undersigned, or any attachment against the credit or property of
the undersigned with the company all such liabilities of the undersigned shall,
at the option of the company, become and be immediately due and payable
without demand of payment.
4. Upon failure of the undersigned either to pay any indebtedness to the
company and/or to any such other creditor when becoming or made due, or to
keep up the margin of collateral securities above provided for, then, and in
either event the company is authorized immediately to sell, assign, and deliver
the whole of said securities so held by it, or from time to time any part thereof;

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135

or any substitutes therefor, or any additions thereto, at any brokers’ board,
or at public or private sale, for cash, upon credit, or for future delivery, all at
the option of the company, without either advertisement or notice, which are
hereby expressly waived, and to apply the net proceeds thereof to one or more
or all of such liabilities of the undersigned, whether then due or not. Upon
any sale or sales at public auction or brokers’ board, or exchange above pro
vided for, the company may bid for and/or purchase the whole or any part of
said securities or property, free from any right of redemption, which is hereby
waived and released.
5. All securities deposited by the undersigned with the company as collateral
to any such liabilities of the undersigned may be pledged by the company,
either alone or mingled with other securities, to the United States or to the
Federal reserve bank, to secure deposits or other obligations of the company,
whether or not such liability of the company be in excess of such liabilities of
the undersigned.
6. Calls for collateral or any notices to the undersigned may be made or
given by the company by leaving or mailing same to the address given below
or the last known address of the undersigned, with the same effect as if
delivered to the undersigned in person.
It is further agreed that these presents constitute a continuous agreement,
applying to any and all future as well as to existing transactions between the
undersigned and the company for its own account and/or the account of any
other person, firm, or corporation.
Dated, New York, N. Y „ ---------day of__________ 19__
Address.
W itn ess:_____________________

(b)
Know all men by these presents, that the undersigned, in consideration of
financial accommodations given, or to be given, or to be continued to the under
signed by Central Hanover Bank & Trust Co. (hereinafter called the company),
hereby agree with the company that whenever the undersigned shall become or
remain directly, or contingently, indebted or liable to the company for money
loaned, or for money paid for the use or account of the undersigned, or for any
overdraft or upon any promissory note, draft, guaranty, or upon any other
obligation, or in any other manner whatsoever, the company shall then and
thereafter have the following rights against the undersigned, or his, its, or their
executors, administrators, successors, or assigns, in addition to those created
or given by law, or implied from the circumstances from which such indebted
ness and/or liability arose, namely:
1. All property pledged or deposited by the undersigned with the company as
collateral security for any indebtedness or liability of the undersigned to the
company, together with any and all substitutes therefor and additions hereto,
is hereby pledged by the undersigned with the company as security for any other
indebtedness and/or for any other liability of the undersigned to said company,
whether now existing or hereafter contracted; and the company shall also have
and is hereby granted a lien for the amount of all indebtedness and all liabilities
aforesaid upon any moneys now or hereafter held by the company on deposit or
otherwise to the credit of, or belonging to the undersigned, and upon all prop
erty at any time deposited with, or left in the possession of the company by
the undersigned, for safekeeping, or otherwise. The undersigned will upon
demand, at any time, and from time to time, deposit and pledge with the com
pany additional approved collateral of a kind and of a market value satisfactory
to the company to further secure any indebtedness or liabilities aforesaid.
2. Upon the failure of the undersigned to comply with any such demand, or
to make such deposit or pledge, or upon the failure in business, bankruptcy,
receivership, or making of an insolvent assignment by the undersigned, or by
any other person who may be or become liable directly or contingently upon or
for any indebtedness or liability aforesaid, then and in any such event all
indebtedness and/or liability of the undersigned to the company aforesaid,
whether or not then due and payable, shall, at the option of the company, with
out further demand or protest, become immediately due and payable by the
undersigned notwithstanding any later maturity of such indebtedness or liability
specified in the instrument or agreement evidencing the same, and notwithstand
ing any delay, extension, or grace allowed to the undersigned by any such
instrument or agreement.

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STOCK EXCHANGE PRACTICES

3. Upon failure of the undersigned to pay any indebtedness or liability afore
said to the company at its maturity, or upon such liability or indebtedness
becoming due or payable as aforesaid, or upon failure of the undersigned to
deposit and/or pledge additional collateral security as above provided, then
and in any such event, the company may immediately, without demand and
without notice to the undersigned, which demand and notice are hereby ex
pressly waived, and without advertisement, sell the whole or any part of the
collateral security and any substitutes therefor and any additions thereto any
any other property at any time transferred to, or deposited with or left in the
possession of the company by the undersigned for safe-keeping or otherwise, at
public or private sale, upon any broker’s board or on the New York Curb or
otherwise, and may apply the proceeds of sale and any moneys now or hereafter
held by the company on deposit or otherwise to the credit of or belonging to
the undersigned toward the payment of any or all indebtedness and/or liabilities
aforesaid of the undersigned, whether now or hereafter contracted or existing,
together with interest and expenses of sale, the undersigned remaining liable
for any deficiency remaining unpaid after such application. If any such sale
be at broker’s board or on the New York Curb or at public auction, the com
pany may itself be a purchaser at such sale, free from all right or equity of
redemption of the undersigned, which right and equity are hereby expressly
waived and released.
4. The company may, in its absolute discretion, and for its own benefit,
transfer or repledge with any person, firm, or corporation all or any of the
collateral security hereby pledged, either by itself or mingled with the property
of others in bulk or otherwise, for any sum not in excess of the amount due
the company from the undersigned at the date of such transfer or repledge by
the company, and the company may assign and transfer this agreement to any
other person, firm, or corporation, and may deliver the collateral security and
any substitutes therefor and additions thereto to the transferee, and the com
pany shall thereafter be forever relieved and fully discharged from any
responsibility or liability in the premises.
5. No failure or omission by the company, upon any default of the under
signed, to exercise any right or remedy hereby granted to the company, shall
constitute a waiver by the company of the right to exercise any such right or
remedy upon any subsequent default.
6. In the event that this agreement is signed by more than one ,the same
shall apply to and bind the undersigned jointly and severally.
7. It is further agreed that these presents constitute a continuing agreement,
applying to any and all future as well as to existing transactions between the
undersigned and the company.
Dated at the city of New York, th e--------- day o f -----------, 193— .

(c)
Know all men by these presents, That the undersigned, in consideration
of financial accommodations given, or to be given or continued to the under
signed by the Guaranty Trust Co. of New York, including any accommodations
given on behalf of any disclosed or undisclosed principal, hereby agree, jointly
and severally, with the said trust company that whenever the undersigned
shall become or remain directly or contingently, indebted to the said trust
company for money lent, or for money paid for the use or account of the under
signed, or for any overdraft, or upon any indorsement, draft, or guaranty,
or upon any other claim, or in any other manner whatsoever, the said trust
company shall then and thereafter have the following rights, in addition to
those created by the circumstances from which such indebtedness may arise,
against the undersigned, or his or their executors, administrators, successors,
or assigns, namely:
1.
All securities deposited by the undersigned with said trust company, as
collateral to any such obligations or liabilities of the undersigned to said
trust company, shall subject thereto also be held by said trust company as
security for any other obligation or liability, direct or contingent, of the
undersigned to said trust company, whether then existing or thereafter arising;
and said trust company shall also have a lien upon any balance of the deposit
account of the undersigned with said trust company existing from time to time,
and upon all property of the undersigned of every description given unto
or left with said trust company for safe keeping or for any other purpose, or

STOCK EXCHANGE PEACTICES

137

coming into the hands of said trust company in any way, or in transit to or
from said trust company, as security for any obligation or liability of the
undersigned to said trust company now existing or hereafter contracted.
2. Said trust company shall at all times have the right to require from the
undersigned that there shall be deposited and pledged with said trust company
as additional security, securities satisfactory in character and amount to said
trust company; and upon the failure of the undersigned at all times to keep
a margin of securities with said trust company for any or all such obligations
or liabilities of the undersigned satisfactory to said trust company, or to
furnish such additional margin when required, or upon nonpayment of either
interest or principal of any obligation or liability to the trust company when
due, or upon the insolvency of the undersigned, or the filing of a petition
in bankruptcy by or against tbe undersigned or the making of an assignment
for the benefit of creditors by the undersigned, or the application for the
appointment, or the appointment of any receiver of or of any of the property
of the undersigned, or the issuance of any warrant of attachment against any
of the property of the undersigned, then and in any such event all obligations
or liabilities of the undersigned to said trust company shall, at the option of
said trust company, become immediately due and payable without notice, not
withstanding any credit or time theretofore allowed to the undersigned on any
of the said liabilities: Provided, however, That in the event of the adjudication
in bankruptcy of, or appointment of a receiver of, or of any of the property of,
or of the expulsion or suspension by the New York Stock Exchange or other
exchange as a member, of any of the undersigned, all said obligations or
liabilities shall forthwith become due and payable without demand or notice.
3. Upon failure of the undersigned either to pay the interest or principal
of any obligation or liability to said trust company when becoming or made
due, or to maintain the margin of collateral securities as above provided for,
then and in any such event said trust company may immediately, without
demand of payment, without advertising, and without notice to the undersigned,
which hereby are expressly waived, sell any or all of the securities or other
property of the undersigned held by it as aforesaid as against any or all of
the obligations or liabilities of the undersigned, either at the New York Stock
Exchange or at any broker’s board or at public or private sale, and apply the
proceeds of such sale as far as needed toward the payment of any or all of such
obligations or liabilities, whether then due or not, together with interest and
expense of sale, the undersigned to remain responsible for any deficiency
remaining unpaid after such application. If any such sale be at either the
New York Stock Exchange, or at a broker’s board or at public auction, said
trust company may itself be a purchaser at such sale of the whole or any part
of the securities or other property sold free from any right or equity of
redemption of the undersigned, such right and equity being hereby expressly
waived and released. Upon default as aforesaid, said trust company may
also apply toward the payment of said obligations or liabilities all balances
of any deposit account of the undersigned with said trust company then
existing.
4. If any tangible property shall at any time become subject to the lien cre
ated hereby or by any other agreement between the undersigned and the trust
company, the undersigned agrees at its own expense at all times to keep the
same fully insured with responsible companies acceptable to the trust com
pany, against loss by fire and any other risk to which said property may be
subject. The insurance policies or certificate of acceptable companies will be
deposited with the Guaranty Trust Co. of New York on demand, said trust
company being designated in the policies as the assured in the following form:
Guaranty Trust Co. of New York for account of whom it may concern. Loss,
if any, to be adjusted w ith --------------- and payable to the Guaranty Trust
Co. of New York for account of whom it may concern. In case of failure on
the part of the undersigned to effect such insurance, the trust company may
itself insure such property for account of the undersigned. The trust com
pany may at any time transfer into its own name or that of its nominee
securities in registered form held as collateral security. In case during the
term of this agreement transactions of the character referred to herein shall
be had between said trust company and any one or more of the undersigned,
the security herein provided for shall be applicable to and the provisions
hereof shall govern each of such transactions.

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It is further agreed that these presents constitute a continuing agreement
applying to any and all future as well as to existing transactions between the
undersigned and said trust company.
Dated, New York, th e______ day of - __________, 1 9 3 ...

(d ) General Coixateral A greement
In order to obtain loans, advances, acceptances, and/or other financial ac
commodations from, or otherwise deal with, Irving Trust Co., New York City,
or any successor of said Irving Trust Co. (said Irving Trust Co. and each and
every successor thereof being hereafter referred to as “ the trust company” )
and in consideration therefor, the undersigned hereby agree(s) with the trust
company as follows in respect of any and all liabilities of the undersigned to
the trust company due or to become due, now or hereafter existing, direct or
indirect, absolute or contingent, liquidated or unliquidated, at law or in
equity or otherwise, and whether tortious, or acquired by pledge or purchase
from the undersigned or others, or incurred by overdraft, direct or implied
contract, or arising by operation of law or in any other manner whatsoever
(all of which liabilities are hereinafter referred to as “ the obligations ” ) to w it:
1. All loans, advances, or credits heretofore or hereafter obtained from the
trust company by the undersigned, as well as all present and future indebted
ness of the undersigned to the trust company, shall, unless otherwise agreed
upon, be repayable by the undersigned at the trust company upon demand with
interest.
2. As collateral security for the repayment of the obligations the trust com
pany may hold and retain all property and security from time to time pledged
under and pursuant to the terms hereof, as well as any and all property and
securities, and all right, title, and interest of the undersigned, or any one or
more of them, in and to all property and securities (including without limiting
in any way the general nature of the foregoing, any and all negotiable instru
ments, commercial paper, bills of lading, warehouse receipts and other docu
ments, the goods represented thereby and the proceeds thereof, all policies of
insurance thereon and the proceeds of such policies, bonds, stocks, credits,
choses Id action, deposit or other accounts, or balances, claims, and demands)
now or hereafter given unto, or left in the possession or custody or under the
control of, or maintained with, the trust company by or for the account of
the undersigned, or any one or more of them, for safekeeping or any purpose
whatsoever, whether or not the trust company shall accept the same for such
purpose (all remittances and property to be deemed left with the trust com
pany as soon as put in transit to it by mail or carrier, or lodged for its ac
count with any correspondent or agent). All of said property and securities
and rights therein are hereinafter designated as “ security,” and the under
signed hereby pledge (s) to the trust company all such security capable of
pledge and bargain(s), sell(s), assign(s), and transfer(s) to the trust com
pany and/or give(s) it a general lien upon all right, title, and interest of the
undersigned in and to any and all of the security incapable of pledge or
Inadequately pledged.
3. The undersigned further agree(s) to deliver to the trust company upon de
mand additional collateral to its satisfaction should the market value of any of
the security at any time subject hereto decline, or should any change occur in
the marketability thereof, or should any of such security for any reason be
deemed unsatisfactory by the trust company.
4. The undersigned hereby agree (s) to reimburse the trust company for any
and all costs and expenses of every kind which may be paid or incurred by
the trust company in the collection of, and/or realization upon, and/or the
attempted collection of, and/or attempted realization upon, any and/or all
of the obligations and/or any and/or all of the security, and/or for the insur
ance and/or in the sale or delivery, as in this agreement provided, of any
and/or all of the security, and the repayment of all such costs and expenses
(including taxable legal costs and charges for legal services) is hereby secured
in the same manner and to the same extent as any of the obligations.
5. On the nonperformance of any of the promises herein contained, or upon
the nonpayment of any of the obligations at maturity, or in case of failure of
the undersigned to meet at maturity any liabilities of the undersigned to any
other party, or upon the failure of the undersigned to furnish additional se

STOCK EXCHANGE PRACTICES

139

eurity to the satisfaction of the trust company as above provided, or upon
the death, declared insolvency, or failure in business of, or appointment of a
receiver for, or commission of any act of bankruptcy by, or commencement
of any bankruptcy proceedings by or against the undersigned, or the entry of
any judgment against the undersigned, or levy under a warrant of attachment
upon the credit property of the undersigned with the trust company, or in
case any of the foregoing defaults or contingencies be committed by, or occur
with reference to, any one or more of the undersigned (if there be more than
one) or any indorser or guarantor of any of the obligations or security, all
the obligations of the undersigned and of each of them to the trust company,
shall at the option of the trust company immediately mature and beeome forth
with due and payable without demand or notice, and full power and authority
are hereby given to the trust company to sell, assign, transfer, and deliver
the whole, or from time to time, any part of, any or all of tne security or
rights or interests therein, at public or private sale, or at the New York Stock
or Curb Exchange, or at any exchange or broker’s board, at such prices at
it may deem best, and either for cash or on credit or for future delivery, at
the option of the trust company, or any one or more of its officers, without
either demand, advertisement, or notice of any kind, which are hereby ex
pressly waived; and if any of the security, or any interest therein, is disposed
of at private sale, the trust company shall be relieved from all liability or
claim for inadequacy of price. At any such sale the trust company may itself
purchase the whole or any part of the security, or rights or interests therein,
sold, free from any right of redemption on the part of the undersigned, which
is hereby waived and released. If any of the security should be sold on credit
or for future delivery, the security so sold may be retained by the trust com
pany until the selling price is paid by the purchaser, but the trust company
shall incur no liability in*case of failure of the purchaser to take up and pay
for the security so sold. In case of any such failure the security may be
again sold.
Upon any such sale or other realization upon any or all of the security, the
trust company may apply the proceeds thereof, after the payment therefrom of
all expenses incident to sale, delivery, and/or collection toward the payment of
any or all of the obligations at its option, and the undersigned shall continue
liable for any deficiency remaining after such application.
6. The trust company at its discretion, without notice to the undersigned,
and whether or not any of the obligations be due, in its name, or in the name
or names cf the undersigned, or of any one or more of them, or otherwise, may
indorse, demand, sue for, collect, and/or receive any money or property at any
time due, payable or receivable upon, or on account of, or in exchange for, or
may take any action it may deem necessary for its cwn protection with respect
to, any of the security. Upon the happening of any of the contingencies enumer
ated in article 5 hereof, the trust company in its name, or in the name or names
of any one or more of the undersigned, or otherwise, may make any compromise
or settlement it deems desirable with reference to and/or otherwise realize upon,
with or without suit, any of the security, or any claim by or against the trust
company with respect thereto or to the proceeds thereof, and in so far as the
security shall consist of negotiable instruments and/or any chose or choses in
action, the trust company may renew or extend the time of payment or perform
ance, or arrange for payment in installments, or otherwise modify the terms as
to any other parties liable thereon, of any thereof, or of any claims with respect
thereto or to the proceeds thereof. By the exercising of any of the foregoing
powers the trust company shall not incur any responsibility to, or discharge or
otherwise affect any liability of the undersigned with respect to any of the
obligations, or upon, or in connection with, any of the security.
7. As respects any negotiable instrument to which the undersigned, or any
one or more of them, is a party, or which at any time may be included in the
security, the undersigned hereby waive (s) presentment, protest, and notice of
protest or dishonor.
8. If any tangible property shall at any time be included in the security hereander, the undersigned agree (s) at the undersigned’s own expense at all time
to keep the same fully insured with responsible companies acceptable to the
trust company against loss by fire and any other risks to which said property
may be subject. The insurance policies or certificates on said property shall be
deposited with the trust company on demand, and the loss thereunder shall be
payable to the trust company or as the trust company may elect. In case of

140

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failure on the part of the undersigned to effect such insurance, the trust com
pany may itself insure such property at the expense of the undersigned.
9. The trust company may assign or transfer the whole or any part of any
of the obligations, and may transfer therewith as collateral security therefor the
whole or any part of the security. The transferee shall have the same rights
and powers with reference to the obligations so transferred and the security
transferred therewith as are hereby given to the trust company, and upon such
transfer, the trust company shall be fully discharged from all claims with
respect to any security so transferred, but shall itself retain all rights and
powers hereby given with respect to any security not so transferred.
10. No delay on the part of the trust company or any transferee in exercising
any power or right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any power or right hereunder preclude other or
further exercise thereof, or the exercise of any other power or right. The
rights, remedies, and powers hereby conferred are irrevocable, cumulative, and
not exclusive of but in addition to, any rights, remedies, and powers which the
trust company, or its transferees, may or would otherwise have.
11. All rights, questions, disputes, and controversies arising under this agree
ment shall be determined according to the laws of the State of New York.
12. Galls for collateral or any notices to the undersigned may be personally
made or given, or may be made or given by leaving the same at the address
given below, or at the last known address of the undersigned, or any of them,
or by mailing, telephoning, telegraphing, or cabling the same to any such
address with the same effect as if delivered to the undersigned in person.
13. If the undersigned are more than one, this agreement shall be joint and
several. In such case, each of the undersigned, to secure the repayment of any
and all obligations as above defined, now or hereafter owing to the trust com
pany by him or it, individually, and/or jointly with any other or others, hereby
confers upon the trust company with respect to any and all property or property
rights now or hereafter owned by him or it separately, or jointly with such
other or others, the same security, rights, powers, and remedies as have herein
before been conferred upon the trust company with respect to the joint property
and property rights of all of the undersigned for the repayment of their joint
obligations.
14. This agreement shall be a continuing agreement applying to all futures as
well as to all existing transactions. It shall bind all administrators, executors,
heirs, partners, successors, and assigns cf the undersigned, and each of them,
and shall not be affected by any change in personnel, or by the death or retire
ment of any member, of a partnership.
New York C ity ,----------------, 193—.
Address
( e ) A greem ent

Whereas the undersigned expect from time to time to borrow money from
Manufacturers Trust Co. (hereinafter called bank) and to pledge with the bank
property of various kinds as collateral security for the payment of such loan or
loans to be hereafter made by the bank: Now, therefore,
It is agreed by the undersigned (who if two or more in number shall be jointly
and severally bound) with the bank, for and in consideration of the loans here
inafter to be made, all of which loans the undersigned agree to repay according
to the terms thereof, that all property thus pledged with it may be held as col
lateral security for the payment of such loan or loans as well as for the pay
ment of any other obligation or liability, direct or indirect, contingent or abso
lute, due or to become due, whether now existing or hereafter arising of the
undersigned (or any of them) to the bank; and the undersigned agree to
deliver to the bank additional securities to the satisfaction of the bank im
mediately upon its demand, it being understood that the bank shall in its own
discretion have the right at all times to require same; and should the market
value of the pledged securities as a whole suffer any decline, to make such
delivery immediately upon such decline without notice or demand; and in
any such contingency or contingencies, if the bank shall so request, to make
payments on account to the bank’s satisfaction. The undersigned hereby
give to the bank a lien for the amount of all such obligations and liabilities

STOCK EXCHANGE PRACTICES

141

upon all the property or securities now or at any time hereafter given nnto or
left in the possesion of the bank by the undersigned (and/or any and each of
them) whether for the express purpose of being used by the bank as collateral
security or for any other or different purpose, and also upon any balance of the
deposit account of the undersigned (and/or any and each of them) with the
bank. Failure of the bank to exercise said lien in any one or more instances
shall not be deemed a waiver thereof.
Upon the failure of the undersigned to furnish satisfactory additional securi
ties or to make said payments on account forthwith in case of decline or request
as aforesaid, or in case of failure of the undersigned or any of them to meet
at maturity any liability either to the bank or to any other party, or upon the
insolvency or failure in business of, or appointment of a receiver for, or the
commencement of bankruptcy proceedings by or against the undersigned, or
any of them, or the making of an assignment for the benefit of creditors by the
undersigned or any of them, or the securing or entry of any judgment against
the undersigned or any of them, or the issuance of a warrant of attachment,
distraint warrant, or injunction with respect to any deposits or property of the
undersigned or any of them with the bank, or in the event that the financial or
other condition of the undersigned or any of them shall be such as in the opinion
of the bank to in any way impair its security, increase its risk, or make ad
visable any action by the bank, or in case any such event occurs with respect to
any indorser, comaker, surety, or guarantor (if any) of any or all of the
obligations of the undersigned, or any of them, to the bank, or with respect to any
person or persons, firm or corporations who are or may be jointly and/or
severally, primarily or secondarily, liable with the undersigned, or any of them,
for the payment of said obligations, then and in every such case absolute,
due or to become due, of the undersigned and/or each of them shall forthwith
become due; and in any of such events, and whether or not the said obligations
and liabilities, or any of them, have become presently due and payable, the bank
may, without demand of performance, or advertisement, or of notice of intention
to sell, or of time or place of sale, or to redeem, or other notice whatsoever to
the undersigned, all of which demands, advertisements, and/or notices are
hereby waived by the undersigned, sell, assign, and deliver in one or more
parcels, at public or private sale, or at the New York Stock Exchange, or at any
other exchange or brokers’ board, at such prices as it may deem best, and either
for cash or on credit or for future delivery, the whole of the said securities, or
any part thereof, or any substitutes therefor, or any additions thereto, or any
other securities or property given unto or left in the possession of the bank by
the undersigned, whether for the express purpose of being used by the bank as
collateral security or for any other different purpose, or in transit to and from
the bank by mail or carrier for any of the said purposes. At any such sale the
bank may itself purchase the whole or any part of the property sold, free from
any right of redemption on the part of the undersigned, which is hereby waived
and released. In case of any sale or other disposition of any of the property
aforesaid, after deducting all costs or expenses of every kind for collection,
sale, or delivery, the bank may apply the residue of the proceeds of the sale or
sales so made to pay one or more or all or any of said obligations or liabilities
to it, making proper rebate for interest on obligations or liabilities not
then due and returning the overplus, if any, to the undersigned, who agreed to be
and remain liable to the bank, jointly and severally, for any deficiency. The
undersigned do hereby authorize and empower the bank, at its option, at any
time, to set-off and apply to the payment and extinguishment of any of the
obligations or liabilities hereinbefore referred to, whether now existing or
hereafter contracted direct or contingent, and whether then due or not due, any
and all moneys now or hereafter in the hands of the bank, on deposit or other
wise, to the credit of or belonging to the undersigned, or any of them, or to
which they may be or become entitled.
The bank may assign or transfer this instrument and may deliver the said
collateral security or any part thereof to the transferee or transferees, who
shall thereupon become vested with all the powers and rights above given to
the bank in respect thereto, and the bank shall thereafter be forever relieved
and fully discharged from any liability or responsibility in the matter. The
bank shall not by any act, delay, omission, or otherwise be deemed to have
waived any of its rights or remedies hereunder, unless such waiver be in writ
ing signed by a duly authorized officer of the bank in which case it shall become
effective only to the extent therein set forth; a waiver by the bank of any right
or remedy on any one occasion shall not be construed as a bar to the exercise
thereof on any future occasion.
119852— 33—APT.—

142

STOCK EXCHANGE PRACTICES

All the terms of this agreement shall apply to and be binding in respect of
any loan or loans made or held by the bank for account of, or as agent for, other
banks, trust companies, bankers, corporations, firms, or persons, or for any
others whomsoever, and that such other banks, trust companies, bankers, corpo
rations, firms, or persons, or any others whomsoever, shall have and may exer
cise the same rights as are herein granted to the bank in respect of its own
loans, and that the bank may proceed hereunder for account of or as agent for
those for whose account it may have made or held any such loans to the under
signed, in the same manner, and that it may exercise the same rights and
options as it does when acting for its own account; it being understood that
the bank need not at the time of making any loans specify whether same are
made for its own account or for the account of others.
In the case of call or demand loans the renewal rate for call or demand loans,
as announced on the New York Stock Exchange, shall be the rate at which call
or demand loans made or held by the bank, either for its own account or for
account of or as agent for other banks, bankers, trust companies, corporations,
firms, or persons, or for any others whomsoever, will be deemed to have been
renewed unless called by the bank, or repaid by the undersigned, on that day.
It is expressly agreed that this agreement, respecting such renewals, shall bind
the undersigned as to such rates without any notification thereof to the under
signed, and that this shall be the continuing agreement of the undersigned in
writing evidencing its assent and agreement thereto.
It is expressly agreed that this agreement shall be binding upon the under
signed’s heirs, executors, administrators, legal representatives and assigns, and
this agreement and all the rights, obligations, and liabilities of the undersigned
hereunder are to be governed by and construed in accordance with the laws of
the State of New York.
Dated New York th e--------- day o f -----------------, 19__.

(f) G en eral Loan and C o lla te ra l Agreem ent
In order to obtain loans from and otherwise deal with the Chase National
Bank of the city of New York (hereinafter called the bank), whether acting in
its own behalf and/or in behalf of others, it is hereby agreed by the under
signed that the bank shall have the rights hereinafter set forth in addition to
those created by the circumstances associated with the incurrence of any lia
bilities as hereinafter defined and with the security as hereinafter defined:
1.
The term “ liabilities ” as herein used shall include any and all loans, ad
vances, and credits by the bank, both in its own behalf and in behalf of others,
to the undersigned, any and all indebtedness, notes, bonds, obligations, and
liabilities of any kind of the undersigned, whether to the bank and/or to any
other or others in whose behalf the bank shall have acted in creating the same,
now or hereafter existing, or heretofore or hereafter acquired from another by
the bank and/or by anyone for whom it has acted or shall act in acquiring the
same, whether absolute or contingent, secured or unsecured, due or not due,
direct or indirect, arising by operation of law, contractual or tortious, liqui
dated or unliquidated, at law, in equity, in admiralty, or otherwise, and whether
heretofore or hereafter incurred or given by the undersigned as security or
otherwise. The term “ security” as herein used shall include any deposit ac
count maintained by the undersigned by the bank or any other claim of the
undersigned against the bank, all money, negotiable instruments, commercial
paper, bonds, stocks, credits, choses in action, claims, demands, or any interest
in any thereof, and any other property, rights, and interests of the undersigned,
or any evidence thereof, which have been or at any time shall be delivered to
the bank or any of its agents, associates, or correspondents for any purpose,
whether or not accepted for the purpose or purposes for which they are deliv
ered; and all such money, negotiable instruments, commercial paper, bonds,
stocks, credits, choses in action, claims, demands, or any interest in any thereof,
and any other property, rights, and interests, or any evidence thereof, as have
or shall come into the possession, control, or custody of the bank or of any of
its agents, associates, or correspondents, or others acting in its behalf, for
account, subject to the order, or otherwise for the benefit or under the control
of the undersigned. The bank shall be deemed to have possession, control, or

STOCK EXCHANGE PRACTICES

143

custody of any security actually in transit to or set apart for it or any of its
agents, associates, correspondents, or others acting in its behalf.
2. As security for any and all such liabilities the undersigned hereby
pledge (s) to the bank all such security capable of pledge and bargain (s),
.sell(s), assign(s), and transfer(s) to the bank and/or give(s) it a general lien
upon all right, title, and interest of the undersigned in and to any thereof in
capable of pledge or inadequately pledged, such pledge and/or sale, assignment,
transfer and/or lien being made or created for the protection and security of the
bank and/or any other or others (but pro rata if held for the benefit of more
than one) for whom it has acted or shall act as agent in connection with the
creation of any such liability; and in trust for the benefit and to the extent
of the interest of any such other or others therein.
3. Hie bank, at its ‘discretion, may, whether or not any of such liabilities be
due, in its name and/or in the name of anyone for whom it has acted as agent
in connection with the creation of any such liability, or in the name of the
undersigned, demand, sue for, collect, and/or receive any money or property at
any time due, payable, or receivable on account of or in exchange for, or make
any compromise or settlement deemed desirable with respect to, any security,
but shall be under no obligation so to do. If the security shall consist of or
indude negotiable instruments and/or other choses in action and/or promises
or agreements of any character to pay money, they may be sold in the manner
hereinafter provided with respect to the sale of any security; or the bank,
and/or anyone in whose behalf it has acted or shall act in obtaining such
security, may extend the time of payment of any such obligation, arrange for
payment of any thereof in installments, or otherwise modify the terms thereof
as to any other party liable thereon, without thereby incurring responsibility to,
or discharging or otherwise affecting any liability of, the undersigned thereon
or in connection therewith. The bank, and/or anyone for whom it has acted
or shall act as agent as herein provided, upon default (in payment, furnishing
security, or otherwise) hereunder or in connection with any such liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon in whole or in part), may sell in the Borough of Manhattan, New York
City, or elsewhere, in one or more sales or parcels, at such price or prices as the
bank and/or anyone for whom it has so acted or shall so act as agent may deem
best, and either for cash or on credit, or for future delivery, all or any of the
security, at any broker’s board or at public or private sale, without demand of
performance or notice of intention to sell or of time or place of sale, and the
bank, and/or anyone in whose behalf it has acted or shall act as hereinbefore
provided, may be the purchaser of any or all property, rights, and/or interests
so sold and thereafter hold the same absolutely free from any claim or right of
whatsoever kind, including any equity of redemption, of the undersigned, any
such demand, notice, or right and equity being hereby expressly waived and
released. The undersigned will bear and pay all expenses (including expense
for legal services of every kind) of, or incidental to, the enforcement of any of
the provisions hereof or of any liability or liabilities or of any actual or at
tempted sale or of any exchange, enforcement, collection, compromise, or settle
ment of any security, and/or of receipt of the proceeds thereof, and will repay
to the bank, and/or to anyone for whom it has acted or shall act as agent as
herein provided, any such expense incurred; and such expense shall be deemed
an indebtedness within the terms of this agreement. The bank, and/or anyone
for whom it has so acted or shall so act as agent, at any time, at its and/or his
and/or their option, may apply all or any of the net cash receipts from or on
account of any security to the payment in whole or in part of any or all of the
liabilities, applying or distributing the same as it and/or he and/or they shall
elect, whether or not the item or items on which such payment is applied be
due, making proper rebate of interest or discount in case of payment on any
item not due. Notwithstanding that the bank, whether in its own behalf and/or
in behalf of another and/or of others, may continue to hold security and regard
less of the value thereof, the undersigned shall be and remain liable for the
payment in full, principal and interest, of any balance of said liabilities and
expenses at any time unpaid.
4. If at any time the security for any of such liabilities shall be unsatisfac
tory to the bank, or any of its officers, and the undersigned shall not on demand
furnish such further security or make such payment on account as shall be
satisfactory to the bank, or if any sum payable upon any of said liabilities be

144

STOCK EXCHANGE PRACTICES

not paid when due, or if the undersigned or any maker, obligor, indorser*
guarantor, surety, issuer of, or other person liable upon or for any of said
liabilities, or any maker, obligor, indorser, guarantor, surety, issuer of, or other
person liable upon or for any security, shall die or shall become insolvent (how*
ever such insolvency may be evidenced), or make a general assignment for the
benefit of creditors, or if the undersigned or any copartnership of which he is a
member shall suspend the transaction of his or its usual business, or if a petition
in bankruptcy shall be filed by or against, or if a receiver shall be appointed of,
or a writ or order of attachment or garnishment shall be issued or madeagainst any of the property or assets, or any part thereof, of the undersigned,,
or of any such copartnership, or of any such maker, obligor, indorser, guarantor,,
surety, issuer, or other person, thereupon, unless the bank, and/or anyone in.
whose behalf it has acted or shall act as hereinbefore provided, shall otherwise
elect, any and all of said liabilities shall become and be due and payable forthwithout, without presentation, demand, protest, notice of protest, or other notice*
of dishonor of any kind, all of which are hereby expressly waived.
5. The bank may, without any notice to the undersigned, repledge all or any
part of the security separate from any of the liabilities for which it is pledged:
by the undersigned.
6. The bank, and/or anyone in whose behalf it has acted or shall act as agent
in connection with the creation of the same, may assign or otherwise transfer any
or all, or any part of any, of said liabilities, and may transfer and/or deliver to*
any transferee any or all of the security for the liability, or part thereof*,
assigned or transferred, and shall be thereafter fully discharged froin all
claim and responsibility with respect to any and all security so transferred
and/or delivered and the transferee be vested with all the powers and rightsof the transferor and/or transferors hereunder with respect to such security,
but the bank, and/or anyone in whose behalf it has so acted or shall so act,
shall retain all rights and powers hereby given with respect to any security
not so transferred. The bank may also transfer this agreement and, in theevent of such transfer, the transferee hereof shall have the same rights and
remedies hereunder as if originally named herein in place of the bank.
7. No delay on the part of the bank and/or of anyone in whose behalf it has
acted or shall act as hereto provided, or of any transferee, in exercising any
power or right hereunder shall operate as a waiver thereof; nor shall; any
single or partial exercise of any power or right hereunder preclude other or fur
ther exercise thereof or the exercise of any other power or right. The rights
and remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which the bank, and/or anyone in whose behalf it has acted;
or shall act as herein provided, or its and/or his and/or their transferees, may
or would otherwise have.
8. Unless otherwise agreed, the loans, advances, or credits heretofore or
hereafter obtained from or through the bank by the undersigned shall be repay
able at the principal place of business of the bank in New York City upon
demand and shall bear interest at the rate of 6 per cent per annum.
9. The undersigned, if more than one, shall be jointly and severally liable
hereunder, and all provisions hereof regarding liabilities or security of the
undersigned shall apply to any liability or any security of any or all! of them;.
These presents are to be binding upon the heirs, executors, administrators,
assigns, or successors of the undersigned.
New York,----------------, 19— .
(g)
To induce the National City Bank of New York (hereinafter called the
bank) to make loans from time to time to the undersigned or any of them, or
to continue loans already made, the undersigned jointly and severally agreethat in addition to any rights which the bonk would otherwise have against the
undersigned or any of them, or his, its, or their executors, administrators, suc
cessors, or assigns, the bank may hold all property, which term is used herein
to include securities, merchandise, funds, accounts, choses fn action, shipping;
documents, and any and all other forms of property, or evidence of property,
whether real, personal, or mixed, and any right or interest therein, now or
hereafter pledged with the bank by the undersigned or any of them, as col
lateral security for the payment of every such loan or loans as well as for the*
payment of every other obligation or liability, direct or contingent, of theundersigned or any of them to the bank, due or to become due; whether now

STOCK EXCHANGE PRACTICES

145

existing or hereafter arising; and the undersigned will each and all of them
deliver to the bank additional property, or make payments on accounts to its
satisfaction, should the market value of the said property as a whole suffer
any decline; or, upon demand, deposit with the bank approved collateral securi
ties as security for any or all of such obligations or liabilities of the under
signed or any of them to the bank. The undersigned and each of them hereby
give to the bank a lien for the amount of any and all of the said obligations
and liabilities of the undersigned, or any of them, to it, upon all the property
now or at any time hereafter in the possession of the bank, or of any third
party acting on its behalf, for the account of the undersigned, or any of them,
whether coming into such possession for the express purpose of being used by
rhe bank as collateral security, or for any other or different purpose, including
such property as may be in transit by mail or carrier for any purpose, or covered
or affected by any shipping documents in the bank’s possession, or in possession
of any third party acting on its behalf.
On the nonperformance of this promise, or upon the nonpayment of principal
or interest of any of the obligations or liabilities above mentioned, or upon
the failure of the undersigned forthwith, with or without notice, in case of
decline in value of said property as a whole, to furnish satisfactory additional
property, or to make payments on account, or on demand to deposit approved
collateral securities as herein provided, or in case of the filing of a petition
in bankruptcy by or against the undersigned, or any of them, or upon the appli
cation for the appointment of a receiver for, or upon the application for a writ
of attachment against, any of the property of the undersigned, or of any of
them, or in case of the failure in business of or the commission of any act of
insolvency by the undersigned, or any of them, then and in any such case,
all obligations and liabilities, direct or contingent, of the undersigned and
each of them, shall thereupon become due and payable without demand or
notice; and full power and authority are hereby given to the bank thereupon
to appropriate and apply upon such obligations or liabilities, or any of them,
any or all of said property, or any property substituted therefor, or added
thereto, or any other property cf the undersigned, or any of them, as above
described, and to sell, assign, and deliver the whole of the said property, or
any part thereof, at any broker’s board, or at public or private sale, at the
option of the bank, either for cash or on credit, or for future delivery, without
assumption of any credit risk and without either demand, advertisement, or
notice of any kind, all of which are hereby expressly waived. At any such
sale, the bank may itself purchase the whole or any part of the said property
sold, free from any right of redemption on the part of the undersigned, and
each of them, who hereby release the same. In case of any sale or other dis
position of any of the property aforesaid, after deducting all costs or expenses
of every kind for care, safekeeping, collection, sale, delivery, or otherwise, the
bank may apply the residue of the proceeds of the sale or sales or other dis
position of the property, in full or partial payment of one or more or all of the
said obligations or liabilities to it, whether, except for this agreement, such
liabilities or obligations would then be due or not, making proper rebate for
Interest on obligations or liabilities not otherwise then due, and returning the
overplus, if any, to the undersigned, who agree to be and remain liable, jointly
and severally, to the bank upon any of the said liabilities or obligations, or any
part thereof not satisfied by the proceeds of such sale or sales or other dispo
sition. The bank is hereby authorized at its option, at any time, whether the
property held as security is deemed adequate or not, to appropriate and apply
upon any of the said obligations or liabilities, whether now or hereafter exist
ing, and whether then due or not due, any and all moneys now or hereafter
in the hands of the bank, on deposit or otherwise, to the credit of or belonging
to the undersigned, or any of them.
The bank may assign or transfer this instrument, or any instruments evidenc
ing all or any of the obligations or liabilities hereinbefore mentioned, and may
deliver the said property, or any part thereof, to the transferee or transferees,
who shall thereupon become vested with all the powers and rights in respect
thereto given to the banw herein or in the instruments transferred; and the
bank shall thereafter be forever relieved and fully discharged from any liability
or responsibility with respect thereto, but the bank shall retain all rights and
powers hereby given with respect to any and all instruments, rights or property
not so transferred. No delay on the part of the bank or any assignee or trans
feree of the said bank hereunder, in exercising any rights hereunder, shall
operate as a waiver of its or their rights.

146

STOCK EXCHANGE PRACTICES

This agreement applies to all future as well as to all existing transactions
between the undersigned, and each of them, and the bank, and shall not be
affected, impaired, or released by the death of any of the undersigned, or by
the death, resignation, or addition of any partner.
New Y ork ,__________ 19—
In consideration of one dollar paid to the undersigned, and of the making:
of the loans referred to in the within agreement, at the request of the under
signed, the undersigned hereby jointly and severally guarantees to the National
City Bank of New York, its successors and assigns, the punctual payment, at
maturity, of the loans so made, and hereby assent to all the terms and con
ditions of the said agreement, and consent that the securities for any such
loan may be exchanged or surrendered from time to time, or the time of
payment of the said loans or any of them extended, without notice to or further
assent from the undersigned, who will remain bound upon this guaranty,,
notwithstanding such changes, surrender, or extension.

(ft) Know all men my these presents, that the undersigned, in consideration
of the financial accommodations given or to be given, or continued, to the un
dersigned, by or through the New York Trust Co., of the city of New York
(herein called the company), hereby agrees with the company that whenever
the undersigned is o* shall become directly or contingently indebted to the
company, the company shall have the following rights, in addition to those
otherwise created, against the undersigned, or the executors, administrators,
successors, and assigns of the undersigned, namely:
1. All stocks, bonds, or other securities or property deposited by or for ac
count of the undersigned with the comp°ny as collateral to any such loan,
indebtedness, or obligation of the undersigned to the company shall also be held
by the company as security for any other liability or liabilities of the under
signed whether then existing or thereafter contracted, due or to become due?
and for any such liability or liabilities the company shall also have a lien upon
any balance of any deposit account of the undersigned with the company exist
ing from time to time, and upon all property of every description, including
securities now or hereafter given unto or left in possession or custody of the
company for safekeeping or otherwise, or coming into the possession of the
company in any way by or for account of the undersigned, or in which the
undersigned may have any interest (all remittances and property to be deemed
left with and in the possession of the company as soon as put in transit to it
by mail or carrier), as security for any such liability or liabilities.
2. The company shall at all times have the right to require from the under
signed that there shall be lodged with the company as security for all then
existing liabilities of the undersigned to the company, due or to become due,
held or to be held by the company, collateral security to an amount and of a char
acter satisfactory to the company. Upon the failure of the undersigned at any
time, or at all times, to keep a margin of collateral security so satisfactory to
the company, all such liabilities of the undersigned shall become at once due
and payable, at the option of the company, without demand for payment thereof
and notwithstanding any credit or time allowed to the undersigned by any
instrument evidencing any of said liabilities or otherwise.
3. The company is hereby empowered, at its option at any time and from time
to time and without notice, to appropriate and apply toward the payment and
extinguishment of any such liabilities of the undersigned, whether now existing
or hereafter contracted, any and all moneys or other property, or proceeds o f
the sale thereof, now or hereafter in the hands of the company on deposit or
otherwise, for account of, to the credit of, or belonging to, the undersigned,
whether such liabilities are then due or not due.
4. Upon the insolvency of, or any act of bankruptcy of, or upon the appoint
ment of a receiver of the property of, or upon an assignment for the benefit
of the creditors of, the undersigned, or upon the filing of any petition in bank
ruptcy against or by the undersigned, or upon any attachment against the credit
or property of the undersigned with the company, or upon a suspension of the
business of the undersigned, all such liabilities to the undersigned shall, at the
option of the company and without notice, become immediately due and payable
without demand for payment, notwithstanding any credit or time allowed to
the undersigned by any instrument evidencing any of said liabilities.

STOCK EXCHANGE PRACTICES

147

5. Upon failure of the undersigned either to pay any indebtedness to the com
pany or to anyone associated with the company as a participant, as below,
when becoming or made due, or to keep up a margin of collateral securities
above provided for, or to perform any other obligation required, then and in
any such event the company may immediately, without demand of payment,
without advertisement and without notice to the undersigned, all of which are
hereby expressly waived by the undersigned, sell, assign, and deliver the whole
of said securities or property so held by it, or from time to time any part
thereof, or any substitutes therefor, or any addition thereto, at any broker’s
board or at public or private sale, for cash, upon credit or for future delivery,
all at the option of the company, and after deducting all its costs and expenses,
including attorneys’ fees, incident to such sales and application, to apply the
net proceeds thereof to one or more, or all, of such liabilities of the undersigned,
whether then due or not, together with interest, any surplus to be returned to
the undersigned, but any deficiency arising on such sale or sales and applica
tion to be paid by the undersigned, the undersigned to be liable to the company
therefor. Upon any sale or sales at public auction or broker’s board, or
exchange above provided for, the company may bid for or purchase the whole,
or any part, of the securities or property, free from any right of redemption
by the undersigned, which is hereby waived and released. Upon default, as
aforesaid, the company may also apply toward the payment of said liabilities
all balances in any deposit accounts of the undersigned with the company.
6. All securities deposited by the undersigned with the company as collateral
to any such liabilities of the undersigned may be pledged by the company, either
alone or mingled with other securities, to the United States or to the Federal
reserve bank, to seeure deposits or other obligations of the company, whether
or not such liability of the company be in excess of such liabilities of the
undersigned.
7. The company may assign or transfer the whole or any part of any indebted
ness, obligation, or liability of the undersigned, and may transfer therewith,
or set apart as collateral security therefor, for account of such transferee, the
whole or any part of the collateral of the undersigned, held by the company,
and the transferee shall have the same rights and powers with reference to
the indebtedness, obligation or liability transferred and to the collateral trans
ferred therewith or so set apart and the disposition thereof as are hereby given
to said company.
8. Wherever in this agreement an option is given to the company, such;
option may be exercised without notice to the undersigned.
9. As to any loan to the undersigned held by the company, the company may
admit participants and, from time to time, change such participants or their
participations. The provisions of this agreement as to the disposition of col
lateral shall also enure to the benefit of any or all such participants, SO'
admitted, in the disposition of the collateral for such participation loans.
10. These presents constitute a continuing agreement, applying to any and all
future, as well as to existing, transactions between the undersigned and the
company.
Dated, New York, N. Y., th e______day o f ___________ _ 1 9 Witness : ------------------------------Address_____

E x h ib it

No. 36, 'A p ril 21,1932

(See p. 287, this hearing)
FORMS OF DAY LOAN AGREEMENTS

The eight forms of day loan agreements hereinafter enumerated and attached
hereto have been collected at random by the New York Stock Exchange from
corporations engaged in banking in New York City:
(а) Day loan agreement used by Bankers’ Trust Co.
( б) Day loan agreement used by Central Hanover Bank & Trust Co.
(c) Day loan agreement used by Chemical Bank & Trust Co.
(<Z) Day loan agreement used by Guaranty Trust Co.
(e) Day loan agreement used by Irving Trust Co.
( /) Day loan agreement used by Manufacturers Trust Co.
(g) Day loan agreement used by the National City Bank of New York.
(ft) Day loan agreement used by the Marine Midland Trust Co. of New York.

148
•$---------

STOCK EXCHANGE PRACTICES
N e w Y o b k , -------------------------------- -

(a)
The undersigned hereby applies to Bankers Trust Go. (hereafter called
the bank) for a loan of $__________ , to be credited to the account of the under
signed, upon the terms and conditions below stated, and to be repaid at or
before the close of business this day. The avails of said loan shall be received
And used by the undersigned only for one or both of the following purposes:
To pay, in whole or in part, the purchase price of, and thus to obtain certain
securities which the undersigned has contracted to purchase and received; or
to pay, in whole or in part, another loan or other loans heretofore made to the
undersigned, and so to release certain securities held as collateral to such other
loan or loans. The undersigned, as trustee for the bank, shall obtain possession
of the securities aforesaid; and shall deliver or cause to be delivered the same
to the bank as security for this loan before the close of business on this day,
in negotiable form, unless in the meantime the amount of this loan shall have
been repaid to the bank and until such delivery or repayment such securities
shall be charged with such repayment The undersigned may, however, before
the close of business this day sell or transfer, for cash or its equivalent, or
pledge for money contemporaneously loaned, or exchange for other securities,
any or all of said certain securities, but the proceeds of such sales, exchanges,
transfers, and pledges shall be received by the undersigned as trustee for the
bank, and shall be delivered by the undersigned to the bank before the close of
business this day where they shall be credited in payment pro tanto of said
loan, and until such payment such proceeds received in exchange or upon any
such sale, pledge, or transfer forthwith shall be in all respects like security and
charged with the repayment of this loan and subject to the same trust for such
repayment, and subject to the same right of the bank to possession, and other
wise, as herein provided in respect of the certain securities so exchanged.
The undersigned, as further security to the bank, hereby assigns to the bank,
its successor and assigns, all of the right, title, and interest of the undersigned
to and in the securities hereinabove referred to, and to and in any and all
claims of the undersigned against third parties now existing and that may be
created this day for the purchase price, or any present unpaid balance thereof,
of any of said certain securities sold or that may be sold by the undersigned,
and to and in all claims of the undersigned against customers of the undersigned
for the balance due or to become due this day of the purchase price of any of
said certain securities delivered or deliverable to such customers.
Nothing herein contained is intended to lessen the liability of the under
signed to the bank arising from the making of said loan, nor to impair or exclude
the effect or application of any general collateral agreement given by the
undersigned to the bank, nor to confer upon the undersigned any authority to
create any liability on the part of the bank. The term “ securities,” as herein
before used, includes stock, bonds, evidences of indebtedness, or any other form
o f issue, individual or corporate.

New Y ork ,-------------------------------$______
(&) The undersigned hereby applies to the Central Hanover Bank & Trust Co.
(hereafter called “ the Bank & Trust Co.” ) for a loan of $--------------- - to be
•credited to the account of the undersigned, upon the terms and conditions
below stated, and to be repaid at or before the dose of business this day. The
avails of said loan shall be received and used by the undersigned only for one
or both of the following purposes: To pay, in whole or in part, the purchase
price of, and thus to obtain, certain securities which the undersigned has con-,
tracted to purchase and receive; or, to pay, in whole or in part, another loan
or other loans heretofore made to the undersigned, and thus to release certain
securities held as collateral to such other loan or loans. The undersigned, as
trustee for the Bank & Trust Co., shall obtain possession of the securities
aforesaid; and shall deliver, or caused to be delivered the same to the Bank &
Trust Co., as security for this loan, before the close of business on this day,
unless in the meantime the amount of this loan shall have been repaid to the
Bank & Trust Co. The undersigned may, however, before the close of business
this day, sell or transfer for cash or its equivalent, or pledge for money con
temporaneously loaned, or exchange for other securities, any or all of said cer
tain securities, but the proceeds of such sales, transfers, or pledges^ shall be
received by the undersigned as trustees for the Bank & Trust Co., and shall be

STOCK EXCHANGE PRACTICES

149

delivered by the undersigned to the Bank & Trust Co. before the close of busi
ness this day, where they shall be credited in payment pro tanto of said loan*
and the securities received in exchange shall be in all respects charged with
the same trust, and subject to the same right of the Bank & Trust Co. to
possession, and otherwise, as herein provided in respect of the certain securities
so exchanged.
The undersigned, as further security to the Bank & Trust Co., hereby assigns
to the Bank & Trust Co., its successor and assigns, all of the right, title, and
interest of the undersigned to and in the securities hereinabove referred to,
and to and in any and all claims of the undersigned against third parties now
existing and that may be created this day for the purchase price, or any present
unpaid balance thereof, of any of said certain securities sold or that may be
sold by the undersigned, and to and in all claims of the undersigned against
customers of the undersigned for the balance due or to become due this day of
the purchase price of any of said certain securities delivered or deliverable to
such customers.
Nothing herein contained is intended to lessen the liability of the undersigned
to the Bank & Trust Co. arising from the making of said loan; nor to impair
the effect of any general collateral agreement given by the undersigned to the
Bank & Trust Co., nor to confer upon the undersigned any authority to create
any liability on the part of the Bank & Trust Co.
-------- , 19—

New York, N. Y.
D e a r S i r : Please loan us and place to our credit $

pursuant to

our letter of th e_day o f ___________ _ 19—
Very truly yours,
--------------- , 19—.
C h e m i c a l B a n k & T r u s t C o .,

New York, N. Y.
G e n t l e m e n : Referring to the loan which you have to-day made us and to

daily loans which may hereafter from time to time be made to us for the pur
pose of facilitating our business, which loans are to be repaid by us at the close
of each business day, we beg to say that these loans are made for the purpose
of enabling us to pay for the securities purchased by us or for the purpose of
releasing securities heretofore pledged by us as security for loans.
In consideration of your making the above-mentioned loan we agree to pay
all such loans during the same day they are made, and we also agree that the
securities above referred to, or the proceeds of same, and all other securities
which may hereafter from time to time be paid for or released with the proceeds
of such daily loans shall' be specifically held by us as your property to secure
said loans and shall be turned over by us to you on demand as such security in
case any such loan remain unpaid.
Yours very truly,

N e w Y o r k , _________ _ 1 9 __

(d) The undersigned hereby applies to the Guaranty Trust Co. of New York
(hereinafter called “ the trust company” ) for a loan of $__________ , to be
credited to the account of the undersigned, upon the conditions below, and to be
repaid by the close of business this day.
The avails of said loan shall be used only for the following purposes:
(1) To pay, in whole or in part, the purchase price of securities which the
undersigned has contracted to purchase and receive; or
(2) To pay, in whole or in part, other loans heretofore made to the under*
signed, and to release to the undersigned securities held as collateral to such
loans.
The securities received as aforesaid shall be kept separately from all other
securities, and upon their receipt by the undersigned a lien or mortgage shall
arise in favor of the trust company and an itemized list of said securities may

150

STOCK EXCHANGE PRACTICES

be attached to this instrument and made a part thereof before the close of busi
ness this day, and the undersigned hereby agrees to attach such itemized list in
accordance with these terms at the demand of the trust company. The under
signed may, however, before the close of business this, day, sell or transfer, for
cash or its equivalent, or pledge for money contemporaneously loaned, or ex
change for other securities, any or all of said securities mortgaged, but the
proceeds of such sales, transfers, and pledges shall be substituted as security
for this loan. Before the close of business this day, unless in the meantime the
amount of this loan shall have been repaid to the trust company, such securities
shall be delivered to the trust company.
The undersigned, as further security to the trust company, hereby assigns to
the trust company, its successor and assigns, all of the right, title, and interest
of the undersigned to and in the securities hereinabove referred to and to and in
any and all claims of the undersigned against third parties now existing and
that may be created this day for the purchase price, or any present unpaid
balance thereof, of any of said securities sold or that may be sold by the under
signed, and to and in all claims of the undersigned against customers of the
undersigned for the balance due or to become due this day of the purchase price
of any of said securities delivered or deliverable to such customers.
Nothing herein contained is intended to lessen the liability of the undersigned
to the trust company arising from the making of said loan, nor to impair the
effect of any general collateral agreement given by the undersigned to the trust
company, nor to confer upon the undersigned any authority to create any
liability on the part of the trust company.
By
( e ) D a y L o a n A greem en ts

:$_________

N e w Y o r k , _________ , 19 3 __

The undersigned hereby applies to Irving Trust Co. (hereinafter called “ the
company ” ) for a loan of $__________ , upon the terms and conditions below
stated, to be credited to the account of the undersigned with the company and
to be repaid at or before 3 o’clock p. m. this day.
This loan is sought solely to be used in obtaining possession of the following
securities, now located in the Borough of Manhattan, city of New York, viz:

The undersigned agrees to receive the avails of this loan in trust for the
company and to use same on this day only to pay in whole or in part the pur
chase price of said securities and/or any other loan or loans heretofore made
to the undersigned to which said securities are collateral. The undersigned,
•as trustee for the company, agrees to obtain possession of said securities and
to deliver the same to the company before the hour mentioned as security for
this loan, unless in the meantime the amount of this loan shall have been
repaid to the company.
Hie undersigned as further security hereby assigns to the company all the
present and future right, title, and interest of the undersigned in and to said
securities, and also in and to any and all moneys, credits, claims, and other
property which may be in any manner acquired by or through the proceeds
■of tiiis loan. The undersigned agrees to execute and deliver to the company
upon demand any evidence of this loan, any further power of disposition of
collateral and any additional evidence of assignment in such form as the
company may require.
After delivery of said securities to the company the same shall be held by
it not only as security for this loan but also for any other existing or future
liabilities of the undersigned to the company, whether direct or contingent.
In the event of the nonpayment of this loan, or of any of such other liabili
ties, or in the event of the bankruptcy, insolvency, failure in business of, or
appointment of a receiver for, the undersigned, all outstanding liabilities of the
undersigned to the company shall forthwith become due and payable without
demand or notice, and the company may sell the whole or any part of the
said collateral at public or private sale, or at any brokers’ board, without

STOCK EXCHANGE PRACTICES

151

.notice or advertisement of any kind, which is hereby waived, and may apply
the net proceeds of such sale, after deducting all expenses incidental thereto, to
the payment of this and/or any or all such other liabilities of the undersigned
to the company, returning the overplus, if any, to the undersigned, and the
undersigned agrees to remain liable for any deficiency arising on such sale
or sales. At any such sale the company may itself purchase said collateral,
or any part thereof, free from any right of redemption on the part of the
undersigned, which right is hereby waived and released.
Nothing herein contained is intended to impair the liability of the under
signed to the company arising from the making of this loan, nor to affect any
general collateral agreement or other agreement given by the undersigned to
the company, nor to confer upon the undersigned any authority to create any
liability on the part of the company.
4 -----------------

N e w Y o r k , _________ , 1 9 __

(f) The undersigned hereby applies to Manufacturers Trust Co. in New York
for a loan to the undersigned of $--------------- to be credited to the undersigned’s
account, which will be received by us as a trust fund.
It is expressly agreed that all stocks, bonds, or other securities, or the
proceeds thereof, purchased or paid for by the undersigned with, or which may
■come into possession or control of the undersigned out of the avails of, said
loan shall be by the undersigned, or the undersigned’s agent or representative,
held in trust for and deposited with Manufacturers Trust Co. in New York
(hereinafter termed the bank) as security for said loan, it being the intention
and agreement of the undersigned to pledge and deposit with the bank and to
subject to the lien and control of the bank as such pledgee the securities or
moneys so acquired, as collateral to said loan and to any other obligation or
indebtedness of the undersigned to the bank, and it is further agreed that the
bank shall have a lien upon all property of the undersigned and all collaterals
pledged by the undersigned, now or hereafter in possession of the bank, or
under its control, as security for any indebtedness of the undersigned now
existing or to become due or that may be hereafter contracted, with the right
at any time to demand additional security and with the right, in case of a
failure to comply with such demand for additional security or in case of default
in payment, to sell as a whole or in such parts as it may deem advisable, with
out advertisement or notice to the undersigned, at any broker’s board in the city
of New York, or at public or private sale in the said city or elsewhere, or other
wise to dispose of the same in the discretion of any of the officers of the bank,
without notice of amount due or claimed to be due, without advertisement, and
without notice of the time or place of sale, each and every of which is hereby
expressly waived, applying the proceeds thereof upon the said indebtedness,
together with interest and expenses, legal or otherwise, the undersigned to be
liable for any deficiency.
It is further agreed that, upon any sale by virtue hereof, the holder hereof
may purchase the whole or any part of such property discharged from any right
of redemption, which is hereby expressly released to the holder hereof, who
shall have a claim against the maker hereof for any deficiency arising upon
such sale.
It is further agreed that any moneys or property at any time in the possession
of the bank belonging to the undersigned or any of them, and any deposits,
balance of deposits, or other sums at any time credited by or due from the
bank to the undersigned or any of them may at all times at the option of said
bank be held and treated as collateral security for the payment of said loan
whether due or not due. and said bank, may at any time at its option without
demand for payment and without notice charge said loan to the account of the
undersigned or to the account or accounts of any of the undersigned with the
bank, or set off the amount due or to become due upon said loan against any
claim of the undersigned or any of them against the bank.
Nothing herein contained is intended to lessen the liability of the under
signed to the bank arising from the making of said loan, nor to impair the
effect of any general collateral loan agreement given by the undersigned to the
bank, nor to confer upon the undersigned any authority to create any liability
<on the part of the bank.

152

STOCK EXCHANGE PRACTICES

$_____

N e w Y o r k , _________ _ 1 9 — .

(g) The undersigned hereby applies to the National City Bank of New York
(hereinafter called “ the bank” ) for a day loan of $--------- , to be credited by
the bank to the undersigned’s account with the bank, which loan will be
received, as and if granted, by the undersigned as a trust fund, as security for
which loan we are holding, and will hold in trust for your account until
delivered to you or the loan is paid, collateral having a market value of 110 per
cent of the amount of this loan. To induce the bank to grant said loan the
undersigned hereby agrees to repay the same to-day at or before 3 o’clock p. m.
to and at the head office of the bank, together with one day’s interest thereon
at the rate of 1 per cent per annum, and further agrees that all stocks, bonds,
or other securities, or the proceeds thereof, held by us as collateral security as
aforesaid, will be by us deposited with the bank in due form for transfer by
3 o’clock p. m. to-day, unless the loan is then paid, the same being at the risk
of the undersigned until actually delivered to and received by the bank. It is
further agreed that nothing herein shall be construed as a waiver on the part of
the bank of the right at its option to possess itself at any time of the property,
or any part thereof, herein pledged. It is further agreed that the bank shall
have the right at any time, in event of default in payment of the said loan, to
sell, without advertisement or notice to the undersigned, at any broker’s board
in tiie city of New York or at public or private sale in the said city or elsewhere,
or otherwise to dispose of the same in the discretion of any of the officers of
the bank, without notice of amount due or claimed to be due, and without notice
of the time or place of sale, each and every of which is hereby expressly
waived, any or all of the securities which may come into the possession of the
bank hereunder or pursuant to the provisions hereof, applying the proceeds
thereof upon the said indebtedness, together with legal interest and expenses,
the undersigned to be liable for any deficiency with legal interest.
It is further agreed that, upon the sale by virtue hereof, the bank may pur
chase the whole or any part of such property discharged from any right of
redemption, which is hereby expressly released to the bank which shall have
a claim as above defined, against the maker hereof for any deficiency arising:
from such sale.
N e w Y o r k , _________ , 193__

(h)

T h e M a k n e M id l a n d T r u s t C o .

N ew Y ork,

New York City.
D e a r S i r s : Please place to the credit of the undersigned to-day avails of

loan(s) to the undersigned of aggregating $--------------- , which loans (s) the un
dersigned hereby agree (s) to repay to you by the close of business to-day. The
avails of said loan(s) shall be used only to procure securities and/or stocks
by the payment in whole or in part of the purchase price thereof and/or of
the loans to secure which said securities and/or stocks are pledged as collateral.
The undersigned hereby assign (s) to you the securities and/or stocks above
referred to and/or the proceeds thereof and/or any claims against any pur
chaser of any of said securities and/or stocks for the purchase price thereof
and all other securities and/or stocks which may hereafter from time to time
be paid for or released with the proceeds of said loan(s) and agree(s) that
the same shall be kept separately from all other securities and/or stocks and
shall be specifically held by the undersigned as your property to secure said
loan(s) and shall be turned over to you by the undersigned upon demand upon
failure of the undersigned to repay said loan(s) as above provided. An item
ized list of said securities and/or stocks and/or the proceeds of the sale of
any thereof and/or any claims for the purchase price of any thereof sold or
transferred may be attached hereto at any time and made a part hereof, and
the undersigned hereby agree(s) to attach said itemized list forthwith upon
demand.
Anything herein contained to the contrary notwithstanding, the undersigned
may sell or transfer for cash or its equivalent or pledge for money contempo
raneously loaned or exchange for other securities and/or stocks any or all of
said securities and/or stocks hereby mortgaged, but the proceeds of any such
sale or transfer and/or any claim of the undersigned against any of its cus
tomers for the purchase price or any part thereof of any securities and/or
stocks so sold or transferred and any securities and/or stocks received in
exchange shall forthwith upon such sale, transfer, and/or exchange be and
become subject to all the terms hereof as if originally included herein.

Corn

and

W heat Fu t u r e s} M e a n

o nth ly

R an g e; T

raded on

E xchange

I § 2 5 1

3 - SS £ S3 63

g‘ " & t3§
f f -g f f g 0,
® §^ssI 0 M*
I1<
Z*O
tjr¥45O
S ST
®S§§
g §^ a

05
H
0
Q
W
H
M

Q
w
►

Sal

§
B;g,R&
»? a
®*p
<
^
tw «*• po

«<

1►
o

5??f

Cm
CO

154

STOCK EXCHANGE PRACTICES

Com and wheat futures1 ( the mean of the monthly range is used) and apple*
and potatoes 2
Corn

Wheat

Dollars Dollars
1.310
0.913
1.318
.953
1.391
.996
1.538
1.077
1.550
1.086
1.439
1.000
1.314
.964
1.189 . .753
1.163
.766
1.164
.809
1.230
.896
1.210
.901

1928
January...
February..
March.......
April.........
M ay...........
June...........
July............
August____
September.
October___
November.
December..
1929
January___
February...
March....... .
April...........
M ay............
June............
July.............
August.......
September..
October___
November..
December..

1. 231
1.300
1.249
1.249
1.117
1.118
1.354
1.469
1.390
1.255
1. 311
1.344

.970
.994
.959
.954
.888
.888
1.009
.978
.990
.931
.958
.971

Apples

Pota
toes

Cents
161.7
168.3
177.0
183.3
190.6
188.7
156.0
105.5
96.6
99.4
107.9
118.5

Cents
93.6
96.2
113.1
116.8
103.3
83.6
77.4
71.9
64.8
58.0
56.9
57.7

124.1
129.9
134.1
133.5
147.9
153.1
160.5
138.9
131.0
137.9
135.6
143.4

58.9
59.5
58.4
55.3
59.3
63.7
88.0
139.1
136.0
138.2
134.8
135.3

Wheat

Corn

Apples

1930
Dollars Dollars
January................ 1.283
0.930
February.............
1.136
.885
March..................
1.112
.831
April..................... 1.141
.869
1. 074
.821
June......................
1.016
.776
July.......................
.836
.801
August.................
.826
.909
September...........
.829
.859
October...............
.794
1.117
November...........
.609
.771
December............
.584
.745
1931
January..............
.906
.682
February.............
.979
.664
March..................
.844
.640
April___________
.796
.597
M ay......................
.781
.563
.809
.566
July......................
.543
.543
August.................
.520
.404
September...........
.476
.374
October________
.531
.371
November...........
.639
.477
December..........
.571
.417
1932
January...............
.584
.411
February...........
.598
.398
March....... ...........
.570
.381

Pota
toes

Cents
148.3
154.0
155.2
159.9
168.2
173.6
144.8
106.3
103.2
98.4
96.7
98.8

Cents
137. S
139.1
136. $
145.8
149.»
148.6*
129.4
108.8
109.9*
101.4
95.0
89.8

103.8
106.0
105.5
117.1
121.9
131.5
107.9
77.4
70.7
58.9
61.3
65.0

90.386. r
8 4 .»
90.8
87.0
75. a
82.5
76. T
60.1
46.245. T
45. T

66.0

47.1

1 Source: Howard Bartels & Co. (Inc.), Chicago Red Book—M ay futures used November to March,.
Inclusive; September futures used April to July, inclusive; December futures used August to October,,
inclusive.
» Source: Crops and Markets, U. S. Department of Agriculture.

E x h ib it

No. 38, A p r i l 21,1932

(See p. 287 o f this hearing)
C h a r t E n t it l e d “ C o m p a r is o n o p t h e S t o c k A v e rag es w i t h
F ig u r e s ”

Billions •'Dollars
11.0
V < 1 1 II II 1 II II I
10.3

1 1 111 1 11 1 11

R eserve L o a n

DowJonesAvemgo
1 1 1 1 1 380
360
340

10.0
9.5 I

9.0

C o m m e r c i a l Loakis .........

300

v \ T ~ ------- •
N t a * .- . v \ ,

8.5

r
^
i

8.0
7.5

7.0

320

J
"***
Loans of yv
Securities A

280
260
240
------- 220
%

6.5

200

6.0

180
160

3.9
DowsIoncs AveraGES

5.0

Vi lUft

140

4.5

120

4.0

100

3 JJ

3.0

40
111 ri 11 i n i t i r 1T T I n IT IT 1" T 1 T T 1
s o NDJFNANJJASOND J F MAMJJASOND JF MA MJ jJpy'l
1930
1929
r
1931
1932 ffjn 1

155

STOCK EXCHANGE PRACTICES

L is t in g A p p l ic a t io n F il e d w it h t h e N e w Y o b k S t o c k E x c h a n g e F e b r u a r y
15, 1929, b y t h e R a d io C o r po r a t io n o f A m e r ic a

(See p. 565 of this hearing)
C o m m it t e e o n S t o c k L is t , N e w Y o b k S t o c k E x c h a n g e
BADIO CORPORATION OF AMEBICA

(A holding and operating company organized under the laws of the State of
Delaware October 17, 1919)
B preferred stock without nominal or par value, $5 cumulative (nonvoting)—
common stock without nominal or par value {voting)
B preferred Common
stock
stock

New listing

Shares to be authorized by charter.
Authorized for issuance........ ...........
Outstanding......................................
Listing applied for............................

813,365
803.404
None.
803.404

7,500,000:
6,580,404
None.
6,580,404;

Authorized by directors.......................................... ........ .................... ........... ........................ — Jan. 4 ,1829
T o be authorized by stockholders........................................................ ................................ ...... Feb. 27,1929'
Certificate of amendment to certificate of incorporation to be filed in office of secretary of
state of Delaware........................................ ............................................................................ . M ar. 1,1929
N o other authority required.

Capital securities
OLD C A PITA LIZA TIO N
Number of shares
Capital stocks

Par
value

A preferred stock__________________
$50
A common stock ........................
N o par.

Authorized
b y charter

Authorized
for issuance

500,000
1,500,000

395,600
1,155,400

Listed

Outstanding

395,597Ho
» 39a 513
1,155,400
11,144,581$*-

1 In addition, there are outstanding 14,873 shares of the corporation’s original 7 per cent cumulative pre
ferred stock of $5 per share par value, and 18,122 shares of its original common stock without nominal of
par value. Against the said 14,873 shares of the original preferred stock, and against 35,971 shares of com
mon stock o f M arconi Wireless Telegraph Co. of America still unsurrendered, both o f which are convertible
into A preferred stock at the rate of 10 shares of the original preferred stock or 10 shares of the M arconi com
m on stock for 1 share of A preferred stock, there are issuable 5,084ffo shares of the authorized but unissued
A preferred stock. Against the said 18,122 shares of the original common stock, and against 35,971 shares
of the said M arconi common stock still unsurrendered, both of which are convertible into A common stock
at the rate of 5 shares of the original common stock or 5 shares of the M arconi common stock for 1 share o f
A common stock, there are issuable 10,813% shares of the authorized but unissued A common stock.
PROPOSED N EW C A PITA LIZA TIO N
A preferred stock
B preferred stock
Common stock ..

$50
N o par.
N o par.

500,000
813,385
7,500,000

395,600
803,404
6,580,404

395,597^0
803,404
6,580,404

390,513

N e w Y o r k , February 15,1929.
Referring to its previous application, A-6437, dated September 9, 1924, Radio
Corporation of America (hereinafter referred to as the Corporation) hereby
makes application for the listing on the New York Stock Exchange of tempo
rary certificates for: (1) 803,404 shares of its B preferred stock without par
value, on official notice of issuance thereof in connection with the acquisition
of the common stock of Victor Talking Machine Co. (hereinafter referred to as
Victor), as hereinbelow more fully set forth; and (2) 6,580,404 shares of it*
common stock without par value, on official notice of issuance thereof in ex-

156

STOCK EXCHANGE PRACTICES

change for 1,155,400 shares of its A common stock now outstanding (or
issuable) and listed and in connection with the acquisition of the common stock
of Victor, all as hereinbelow more fully set forth, with authority to add to the
list permanent engraved certificates on official notice of issuance in exchange
for temporary certificates.
All of said shares will be, when issued* full paid and nonassessable, with no
personal liability attaching to the stockholders.
AUTHORITY FOB ISSUE

On January 28, 1929, the board of directors of the corporation recommended
to the stockholders the amendment of article fourth of the certificate of incor
poration so as to provide for the creation of the B preferred stock and to pro
vide for the reclassification of the A common stock of the corporation into
new common stock without par value in the ratio of five shares of the new
common stock for each share of the A common stock.
The proposed amendment of the certificate of incorporation will be submitted
for approval to the stockholders of the corporation at a special meeting to be
held February 27, 1929, and the issuance of the B preferred stock and new
Common stock in the amounts and for the purposes herein set forth is expected
to be authorized at that time.
The certificate of amendment will be filed with the secretary of state of
Delaware on the 1st day of March, 1929.
No further authorization required.
PURPOSE OF ISSUE

Pursuant to the aforesaid proposed amendment, and to a plan and agreement
dated January 4, 1929, between the Corporation, J. & W . Seligman & Co., and
Speyer & Co., managers, and the holders of common stock of Victor, the stock
which is the subject of this application will be issued for the following
purposes:
Shares of the B preferred stock, not to exceed 803,404, and shares of the
common stock without par value, not to exceed 808,404, will be issued in
exchange for shares of the common stock of Victor, at the rate of one share of
B preferred stock, one share of common stock and $5 in cash (less any divi
dends paid on Victor common stock in excess of regular dividends at the rate’
of $4 per share per annum) for each share of common stock of Victor; com
mon stock not to exceed 5,777,000 shares will be issued in exchange for the
1,155,400 shares of A common stock of the corporation now outstanding (or
issuable) at the rate of five shares of common stock for each one share of
A common stock, making the total amounts of said stocks to be issued 803,404
shares of B preferred stock and 6,580,404 shares of common stock.
The corporation will capitalize on a conservative basis the assets acquired
in the proposed Victor exchange, and will not allocate to surplus therefrom an
amount greater than the amount of. the unappropriated surplus shown on the
books of Victor at the date of the acquisition of the Victor stock by the
corporation.
stock

p r o v i s io n s

For a complete statement of the stock provisions of the corporation reference
is made to Exhibit A hereto annexed.
h is t o r y a n d

o r g a n i z a t io n

The corporation was organized October 17, 1919, under the laws of the
State of Delaware. For a statement of its history and business reference is
made to its previous application No. A-6437.
SUBSIDIARY CORPORATIONS

Since its previous application, No. A-6437, the corporation has acquired the
following subsidiaries:

119852— 33— APP.

Name of company

Duration of
charter

Business

Delaware.......... . . .........
........doi.............................
........ do.............................
Philippine Islands____
Delaware.......................
........ do.............................

Perpetual
____ do....... .......
........ do...............
........ do...............
........ do...............
........ do......... .....

Selling tubes...........................................
Broadcasting...........................................
Marine communication and selling..
Radio communication and selling___
____ do.......................... ......................

i $25,000
1 50,000
5,000,000
200,000
10,000
25,000

‘ $25,000
>33,000
$2,500,000
87,350
10,000
25,000

i $13,750
»16,500
2,500,000
87,350
10,000
25,000

55
50
100
100
100
100

1 Shares.

Name of company

Date of in
corporation

Illinois
Ohio...............................

Duration of
charter

99 years_____
Unlimited.......

New York..................... Perpetual____
Illinois_______________ ____ do________

Previously owned
by corporation
Par value
Capital
or
number
stock
authorized of shares
Par value
Per
issued
or number
cent
of shares

Business

Public eomfniinicfttloT'S
Selling and ship service_____________

Publishing
Stalling

...

___

$10,000
50.000

$5,000
50.000

100
100

25.000
25.000

100
100

PRACTICES

Illinois Radio Corporation of America1 Oct. 9,1914
The Radio Corporation of America- Mar. 19,1921
Ohio Co.1
Nov. 23,1916
Radio Corporation of America2______ Feb. 7,1923

State in which
incorporated

EXCHANGE

Since its previous application No. A-6437 the corporation has disposed of the following subsidiaries:

STOCK

State in which
incorporated

Date of in
corporation

E. T . Cunningham (Inc.)....................... Feb. 5,1926
National Broadcasting Co...................... Sept. 9,1926
Radiomarine Corporation of America. . Dec. 31,1927
Radio Corporation of the Philippines— Oct. 4,1924
Radio Corporation of Brazil (Inc.)___ Oct. 23,1928
Radio Corporation of Argentina (Inc.)- ____ do.............

Owned b 9 corporati on
Par value
Capital
or number
stock
of shares
authorized
Par value
Per
issued ■ or number
cent
of shares

1 Transferred to Radiomarine Corporation of America.
1 Dissolved.

Crc

158

STOCK EXCHANGE PRACTICES
PROPERTIES

Since its previous application No. A-6437 there have been no important addi
tions to or subtractions from the properties of the corporation.
D EPRECIATION PO LIC Y

The corporation’s depreciation policy with respect to patents is to amortize
the cost of each patent on a yearly basis over its life, so that when the patent
expires it will be written off the corporation’s books.
As to property and apparatus, the corporation’s rates of depreciation, based
on the estimated useful life of the properties, are as follows:
Per cent
per annum

4
High power transoceanic wireless station apparatus and equipment_______
10
Ship station apparatus and equipment__________________________________
Marine coastal apparatus and equipment________________________________
5
Station inventories_______________________________________________ _____
5
Merchandise inventories (average)__ ____________________ ______________ 30
Furniture and fixtures______________ 1__________________________________ 10
In addition to the foregoing reserves have been built up by appropriations
of surplus.
F IN A N C IA L S T A TE M E N TS

The following financial statements of the corporation are given:
(A) Consolidated balance sheet as at December 31, 1927.
(B) Consolidated balance sheet as at December 31, 1926.
(C) Consolidated income statement for five years ended December 31, 1928.
(D) Consolidated surplus account for two years ended December 31, 1927.
(For financial statements of Victor see Exhibit B, hereto annexed.)
R a d io C o r p o r a t io n o f A m e r ic a a n d S u b s i d ia r y C o m p a n i e s

(a) Consolidated balance sheet as at December 31, 1921
a s s e it s

Plant and equipment:
Comprising high power, ship, marine, and
broadcasting stations in operation, with
the necessary equipment, etc___________ $14, 225, 245. 48
Less reserves___________________________
7, 683, 633. 66
Office building at 66 Broad Street, New York
City, and other real estate_________________
Less reserves___________________________

5, 541, 611. 82
1, 302, 439. 06
108, 638. 58

Construction work in progress___ __________________________
Patents and patent rights----------------------------- 12, 671,183. 27
Less reserve for amortization____________
7,155, 640. 51
Contracts and good will_____________________ ________________
Investments in and advances to associated
companies________________________________
7,145, 469. 77
612, 400. 00
Less reserves___________________________
Deferred charges___________________________________________
rin ri*Ant

•

Cash in banks and on hand---------------------4, 235, 400. 83
Collateral call loans_____________________
3, 500, 000. 00
Marketable securities at cost (Dec. 31, 1927,
market value in excess of cost)----------- 10, 542, 329. 87
Notes and trade acceptances
receivable______________
$87, 974. 53
Accounts receivable----------- 10, 408, 073. 05
Less reserve______________

10, 496,047. 58
291, 691.42
--------------------- 10, 204, 356.16

1,193, 800. 48
836, 739.15
5, 515, 542. 76
1.00

6, 533,069. 77
196, 494. 87

159

STOCK EXCHANGE PRACTICES
Current assets—Continued
Inventories at cost—
Merchandise___________ $5, 548,388.24
Ship, shore, and highpower apparatus_____
724,927.71
Less reserves______________

6,273,295. 95
1,375,467.15
----------------------

$4,897,828.80

Total current assets___________________________________ $33,379,915.69
54.197.175.51
LIABILITIES AND CAPITAL

Capital stock:
A preferred, 7 per cent, par value $50 per share—
Authorized, 500,000 shares, issued, 395,597.4 shares____
A common, no par value—
Authorized, 1,500,000 shares, issued, 1,155,400 shares__

19, 779,870.00
13, 767,263.56

Total capital stock_________________________________ 33,547,133.56
Current liabilities:
Current accounts payable-------------------------- $9,145,015.76
1927 Federal income tax accrued__________
1, 405,000. 00
Other accruals-----------------------------------------10,789.71
Dividends declared and unpaid___________
349,813.30
------------------------ 10,910,618.77
290,000.00
Deferred liabilities___________________________________________
Reserves:
General reserve___________________________
1.500,000.00
Other reserves____________________________
919,801.67
-----------------------2,419,801.67
Surplus----------------------------------------------------------------------------------7,029,621.51
54.197.175.51
{B) Consolidated balance sheet as at December 31, 1926
ASSETS

Plant and equipment: Comprising high-power, ship, marine, and
' broadcasting stations in operation with the necessary equip
ment, together with experimental stations, construction work
in progress, sundry machinery, tools, furniture, etc__________ $14,916,863.20
Patents and patent rights_____________________________________ 12,507,067.53
Investments in and advances to subsidiary and associated com
panies______________________________________________________
7,191,339.78
Deferred charges______________________________________________
375,628.83
Installation work for foreign customers_______________________
200,801.84
Current assets:
Cash in banks and on hand_______________ $4,235,755.25
Notes receivable and trade acceptances_____
86,489.21
Accounts receivable______________________
7,042,158.37
Inventories (at cost):
Merchandise______________ $13,064,748.94
Ship, shore, and high-power
1,078,581.08
apparatus______________
------------------------ 14,133,330.02
Investments in marketable securities at
cost (Dec. 31, 1926, market value is in
excess of cost)__________________________
1,286,998.18
Total current assets__________________________________

26,784,731.03
61,976,432.21

160

STOCK EXCHANGE PRACTICES
LIABILITIES AND CAPITAL

Capital stock:
395,597.4 shares 7 per cent A preferred, $50 par value______ $19,779,870.00
1,155,400 shares A common (no par value)------------------------- 13,767,263.56
Total capital stock----------------------------------------------------------Current liabilities:
Current accounts payable__________________ $6,326,064.69
1926 Federal income tax accrued__________
940,015.18
Other accruals_____________________________
8,645.61
Dividends declared and unpaid____________
342,181.79

33,547,133.56

7, 616, 907.27
370,000.00

Deferred liabilities-----------------------------------------------------------------Reserves:
For amortization of patents after writing off
patents expired_________ <________________ 5,490,745.21
For depreciation and obsolescence of plant
and inventories----------------------------------------- 5,463,008.69
For investments in and advances to subsidi
ary and associated companies____________ 1,653,471.22
750,000.00
General reserve-----------------------------------------Other reserves-------------------------------------------967,858.07
Surplus---------------------------------------------------- ------------------------------

14,325,083.19
6,117,308.19
61,976,432.21

1924

1925

1926

1027

$46,251,785.86

$56,009,607.63

$56,651,658.37

$86,900,000.00

3,418,179.09

3,599,686.36

3,034,367.16

4, 593, 00a 00

736,179.20

828,167.80

990,954.10
3,310,722.21

1.521.000.00
5.177.000.00

104,372*64

202,000,00

763,999.02

498,304.01

336,546.14

2,138,00a 00

51,169,143.26

60,935,765.80

65,418,62a 62

100,531,000.00

45,838,398.44

45,431,937.11

53,568,666.09

53,618,97a 34

77,729,000.00

9,503,442.06

5,737,206.15

7,367,009.71

11,709,65tt 28

22,802,000.00

980,907.30

960,145.13

944,589.83

966,095.30

1, 112, 00a 00

1,100,000.00

7oaooaoo

940,500.00

1,405,235.11

2,507,000.00

ioo,ooaoo

loa ooa oo

Gross income from
operations:
Gross sales.............. $50,747,202.24
From transocea
nic communica
3,368,584.31
tions......................
From marine serv
742,345.03
ice..........................
From royalties____
From real estate
operations______
From other in
493,708.92
come................... .

55,341,84ft 50
Deduct: General oper
ating and adminis
trative expenses de
preciation, and cost
of sales.........................

Deduct:
Amortization
of
patents.................
Federal income
taxes................... .
Organization exGoodwill.................
Reserve for foreign
investments........
Losses on old Mar
coni accounts___
Employees’

275,000.00
628,699.40

700,000.00

414,235.89

4,524,067.72

loa o o a o o

1,356,357.07
750,666.66

pen-

750,000.00

loo^ooaoo
4,762,199.75

2,884,212.85

2,725,089.83

3,321,33a 41 |

Transferred to
surplus..............

4,741,242.31

2,852,993.30

4,632,009.88

8,478,319.87

Depreciation amounts.

525,116.00

638,712.00

1928

756,483.00 |

806,634.00 j

100,000.00
3, 810,000.00
18,983,000.00
801,045.00

STOCK EXCHANGE PRACTICES

161

(d) Consolidated surplus account for tvco years ended December SI, 1927
Surplus at Dec. 31, 1925_______________________________________ $6,353,563.02
Add:
Transferred from consolidated income state
ment—
Year, 1926______________________________ $4,632,009.88
Year, 1927______________________________ 8,478,319.87
Prior period adjustments (in 1926)____

13,110, 329. 75
101,453.33
---------------------- 13,211,783.08
19,565,346.10

Deduct:
7 per cent dividends declared on preferred A
Year, 1926______________________________
Year, 1927______________________________

1,368,264.71
1,368,149.81

2, 736,414. 52
Balance of good will written off (in 1926)___ 3,500,000.00
Special addition to reserve for depreciation
and obsolescence of plant and equipment
(in 1927)_________________________________ 4,500,000.00
Machinery, tools, and furniture written down
to $1 (in 1927)___________________________
799,310.07
Patent account written down (in 1927)_____ 1,000,000.00
---------------------- 12,535, 724.59
Surplus at Dec. 31, 1927______________________________

7,029,621.51

AGREEMENTS

Radio Corporation of America agrees with the New York Stock Exchange
as follows:
Not to dispose of an integral asset or its stock interest in any constituent,
subsidiary, owned, or controlled company, or allow any of said constituent,
subsidiary, owned, or controlled companies to dispose of an integral asset or
stock interest in other companies unless for retirement and cancellation, with
out notice to the stock exchange.
To publish statement of earnings quarterly.
To publish once in each year and submit to the stockholders, at least 15 days
in advance of the annual meeting of the corporation, a statement of its financial
condition, a consolidated income account covering the previous fiscal year; and
a consolidated balance sheet showing assets and liabilities at the end of the
year; or an income account and balance sheet of the parent company and of
all constituent, subsidiary, owned, or controlled companies.
To maintain in accordance with the rules of the stock exchange a transfer
office or agency in the Borough of Manhattan, city of New York, where all listed
securities shall be directly transferable and the principal of all listed securities,
with interest or dividends thereon, shall be payable; also a registry office in
the Borough of Manhattan, city of New York, other than its transfer office or
agency in said city, where all listed securities shall be registered.
To notify the stock exchange 30 days in advance of the effective date of any
change in the authorized amounts of listed securities.
Not to make any change in listed securities, of a transfer agency, or of a
registrar of its stock, or of a trustee of its bonds or other securities, without
the approval of the committee on stock list, and not to select as a trustee an
officer or director of the corporation.
To notify the stock exchange in the event of the issuance or creation in any
form or manner of any rights to subscribe to or to be allotted its securities,
or of any other rights or benefits pertaining to ownership in its securities, so as
to afford the holders of its securities a proper period within which to record
their interests, and that all rights to subscribe or to receive allotments and all
other such rights and benefits shall be transferable, and shall be transferable,
payable, and deliverable in the Borough of Manhattan, city of New York.

162

STOCK EXCHANGE PEACTICES

To make application to the stock exchange for the listing of additional
amounts of listed securities prior to the issuance thereof.
To publish promptly to holders of bonds and stocks any action in respect to
interest on bonds, dividends on shares, or allotment of rights for subscription to
securities, notices thereof to be sent to the stock exchange, and to give to the
stock exchange at least 10 days’ notice in advance of the closing of the transfer
books or extensions or the taking of a record of holders for any purpose.
To redeem preferred stock in accordance with the requirements.
To notify the stock exchange if deposited collateral is changed or removed.
To have on hand at all times a sufficient supply of certificates to meet the
demands for transfer.
GENERAL

The fiscal year of the corporation is the calendar year.
The annual meeting of the stockholders is held at 3 o’clock in the afternoon
on the first Tuesday of May in each year (or if such day be a holiday, then on
the next succeeding day not a holiday) at the principal office of the corporation
outside the State of Delaware, namely, 233 Broadway, New York City, N. Y.
In addition to said principal office outside the State of Delaware the corpora
tion maintains offices at 7 West Tenth Street, Wilm’ngton, Del.; 66 Broad
Street, New York, N. Y .; and 443 California Street, San Francisco, Califs
The directors are: Gordon Abbott, Cornelius N. Bliss, Arthur B. *Braun, Paut
D. Cravath, Albert G. Davis, Harry P. Davis, John Hays Hammond, jr., James
G. Harbord, Edward W . Harden, Edwin M. Herr, Edward J. Nally, Edwin W .
Bice, jr., Andrew W. Robertson, David Sarnoff, James R. Sheffield, Gerard
Swope, Owen D. Young.
The officers are: Owen D. Young, chairman of the board; James G. Harbord,
president; David Sarnoff, executive vice president; William Brown, vice presi
dent and general counsel; Manton Davis, vice president and general attorney;
Joseph L. Ray, vice president and general sales manager; Alfred N. Goldsmith,
vice president and chief broadcast engineer; Charles J. Ross, comptroller; George
S. De Sousa, treasurer; Lewis MacConnach, secretary.
The transfer agents will be: A preferred stock and common stock, Corpora
tion Trust Co., 120 Broadway, New York, N. Y .; B preferred stock, Central
Union Trust Co. of New York, 80 Broadway, New York, N. Y.
The registrars will be: A preferred stock and common stock, The New York
Trust Co., 100 Broadway, New York, N. Y .; B preferred stock. The Chase
National Bank of the City of New York, 57 Broadway, New York, N. Y.
Radio C orporation o f Am erica,
By Wm. B row n, Vice President.
This committee recommends that the above-described temporary certificates
for 803,404 shares of class B preferred stock, without par value, be admitted
to the list, on official notice of issuance for acquisition of the common stock of
Victor Talking Machine Co., and that temporary certificates for 6,580,404 shares
of common stock without nominal or par value be admitted to the list, on official
notice of issuance in exchange for present outstanding shares of class A common
stock, with authority to admit permanent engraved certificates, on official notiee
of issuance in exchange for outstanding temporary certificates for common and
preferred stock certificates, all in accordance with the terms of this application.
R o be r t G ib s o n , Chairman.
Adopted by the governing committee, February 27, 1929.
A shhbl Green, Secretary.
M arch 1,1929.
Certificate of amendment to certificate of incorporation approved at meeting
of stockholders held February 27, 1929, filed this day in the office of the Secre*
tary of State of the State of Delaware.
Radio C orporation o f Am erica,
B y Wm. B row n, Vice President.

STOCK EXCHANGE PRACTICES

163

EXHIBITS
These exhibits constitute an essential part of the application. The state
ments of fact contained in them are made on the authority of the applicant
corporation in the same manner as those in the body of the application.
E x h ib it

RADIO CORPORATION OF AMERICA— PROPOSED AMENDED FORM OF ARTICLE FOURTH OF
CERTIFICATE OF INCORPORATION

Fourth. The total number of shares of capital stock that may be issued by
the corporation is 8,813,365, of which 500,000 shares, of the par value of $50
each and of the aggregate par value of $25,000,000, shall be “A” preferred
stock; 813,365 shares, without par value, shall be “ B ” preferred stock; and
7,500,000 shares, without par value, shall be common stock.
A description of the different classes of stock of the corporation and a state
ment of the relative rights of the holders of stock of such classes are as
follows:
I. The holders of the “A” preferred stock shall be entitled to receive out of
the net profits or net assets of the corporation applicable to dividends, when
and as declared by the board of directors, cash dividends at the rate of 7
per cent per annum upon the par value thereof, and no more, payable quarterly
on the 1st days of January, April, July, and October in each year, from the
first day of the quarterly dividend period in which such stock shall have been
issued, before any dividends shall be declared and paid upon or set apart for
the “ B ” preferred stock or the common stock. Dividend upon the “A” pre
ferred stock shall after January 1, 1924, be cumulative, so that if after Jan
uary 1, 1924, dividends upon the outstanding “A” preferred stock at the rate
of 7 per cent per annum upon the par value thereof, from January 1, 1924, or,
in the case of stock issued after January 1, 1924, from the first day of the
quarterly dividend period in which such stock shall have been issued, to the
end of the then current quarterly dividend period for sucb stock shall not
have been paid or declared and a sum sufficient for the payment thereof set
apart, the amount of the deficiency shall be paid, but without interest, or divi
dends in such amount declared and set apart for payment before any dividends
shall be declared or paid upon or set apart for, or any other distribution shall
be ordered or made in respect of, the “ B ” preferred stock or the common stock
or any “ B ” preferred stock or common stock shall be purchased by the
corporation.
II. After the requirements in respect of dividends upon the “A” preferred
stock, as hereinbefore set forth, to the end of the then current quarterly divi
dend period for such stock shall have been met, the holders of the “ B ” pre
ferred stock shall be entitled to receive out of any remaining net profits or
net assets of the corporation applicable to dividends, when and as declared
by the board of directors, cash dividends at the rate of $5 per share per annum,
and no more, payable quarterly on the 1st days of January, April, July, and
October in each year, from the date of issue thereof, or in case of stock
issued on or after July 1, 1929, from the first day of the quarterly dividend
period in which such stock shall have been issued, before any dividends shall
be declared and paid upon or set apart for the common stock. Dividends upon
the “ B ” preferred stock shall be cumulative, so that if dividends upon the
outstanding “ B ” preferred stock at the rate of $5 per share per annum from
the date of issue thereof, or, in case of stock issued on or after July 1, 1929,
from the first day of the quarterly dividend period in which such stock shall
have been issued, to the end of the then current quarterly dividend period
for such stock shall not have been paid or declared and a sum sufficient for
the payment thereof set apart, the amount of the deficiency shall be paid, but
without interest, or dividends in such amount declared and set apart for pay
ment before any dividends shall be declared or paid upon or set apart for, or any
other distribution shall be ordered or made in respect of, the common stock or
any common stock shall be purchased by the corporation.
III. After the requirements in respect of dividends upon the A preferred
stock and the B preferred stock, as hereinbefore set forth, to the end of the

164

STOCK EXCHANGE PRACTICES

then current quarterly dividend period for said two classes of stock, shall have
been met, the holders of the common stock shall be entitled to receive out of any
remaining net profits or net assets of the corporation applicable to dividends
such dividends as may from time to time be declared by the board of directors,
and the holders of the common stock shall be entitled to share ratably in any
dividends as declared to the exclusion of the holders of the A preferred stock
and of the B preferred stock.
IV. Anything herein contained to the contrary notwithstanding, the rights of
the holders of all classes of stock of the corporation in respect of dividends
shall at all times be subject to the power of the board of directors from time
to time to set aside such reserves and/or to make such other provisions, if any,
for working capital and for additions and improvements to its plant and for
acquisition of real or personal property for enlargement of its business and for
general expansion of its business and for any other reserve or reserves for any
proper purpose as said board shall deem to be necessary or advisable.
V. (a) The A preferred stock shall be preferred over the B preferred
stock and the common stock as to assets, and in the event of any liquidation or
dissolution or winding up of the corporation (whether voluntary or involun
tary) the holders of the A preferred stock shall be entitled to receive out of
the assets of the corporation available for distribution to its stockholders,
whether from capital, surplus, or earnings, an amount equal to the par value
thereof, with all dividends accrued or in arrears, for every share of their hold
ings of A preferred stock before any distribution of the assets shall be inade
to the holders of the B preferred stock or of the common stock, and shall be
entitled to no other or further distribution. If upon any such liquidation,
dissolution, or winding up of the corporation the assets thus distributable
among the holders of the A preferred stock shall be insufficient to permit the
payment to such A preferred stockholders of the preferential amounts afore
said, then the entire assets of the corporation thus distributable shall be
distributed ratably among the holders of the A preferred stock.
( 6)
The B preferred stock shall be preferred over the common stock as to
assets, and in the event of any liquidation or dissolution or winding up of the
corporation (whether voluntary or involuntary), after payment in full of the
amounts hereinbefore stated to be payable in respect of the A preferred
stock, the holders of the B preferred stock shall be entitled to receive out
the remaining assets of the corporation available for distribution to its
stockholders, whether from capital, surplus, or earnings, an amount equal to
$100 per share with all dividends accrued or in arrears for every share of
their holdings of B preferred stock before any distributiton of the assets shall
be made to the holders of the common stock, and shall be entitled to no other
or further distribution. If upon any such liquidation, dissolution, or winding
up of the corporation the assets thus distributable among the holders of the
B preferred stock shall be insufficient to permit the payment to such B preferred
stockholders of the preferential amounts aforesaid, then the entire assets of
the corporation thus distributable shall be distributed ratably among the holders
of the B preferred stock.
(c) In the event of any liquidation or dissolution or winding up of the cor
poration (whether voluntary or involuntary), after payment in full of the
amounts hereinbefore stated to be payable in respect of the A preferred stock
and of the B preferred stock, the holders of the common stock shall be entitled,
to the exclusion of the holders of the A preferred stock and of the B preferred
stock, to share ratably in all the assets of the corporation then remaining.
VI. The term “ dividends accrued or in arrears” whenever used herein (1)
with reference to the A preferred stock shall be deemed to mean an amount
which shall be equal to dividends at the rate of 7 per cent per annum upon
the par value thereof from January 1,1924, or, in the case of stock issued after
January 1, 1924, from the first day of the quarterly dividend period in which
such stock shall have been issued, to the end of the then current quarterly
dividend period for such stock—less, in any case, the amount of all dividends
paid upon such stock after January 1, 1924; and (2) with reference to the
B preferred stock shall be deemed to mean that amount which shall be equal
to dividends thereon at the rate of $5 per share per annum from the date
of issue thereof, or; in the case of stock issued on or after July 1,1929, from the
first day of the quarterly dividend period in which such stock shall have been

STOCK EXCHANGE PRACTICES

165

issued, to the end of the then current quarterly dividend period for such stock
(or, in case of redemption, to the date of redemption), less the amount of all
dividends paid upon such stock.
VII.
(a) The A preferred stock at any time outstanding may be redeemed
by the corporation, in whole or in part, at its election, expressed by resolution
of the board of directors, on any quarterly dividend payment date or dates,
upon not less than 60 days’ previous notice to the holders of record of the A
preferred stock to be redeemed, given as hereinafter provided, at the price of
110 per cent of the par value thereof and all dividends accrued or in arrears
(hereinafter called “ the redemption price” ). If less than all of the outstand
ing A preferred stock is to be redeemed, the redemption may be made either by
lot or pro rata, in such mannr as may be prescribed by resolution of the board
of directors. Notice of such election of the corporation shall be given by pub
lication in a newspaper of general circuliation in the Borough of Manhattan,
the city of New York, such publication to be made not less than 60 nor more
than 90 days prior to such redemption date. A similar notice shall be mailed
by the corporation, postage prepaid, not less than 60 nor more than 90 days
prior to such redemption date, addressed to the respective holders of record of
the A preferred stock to be redeemed at their respective addresses as the
same shall appear on the stock transfer records of the corporation, but the
mailing of such notice shall not be a condition of such redemption. Notice hav
ing been so given by publication, from and after the date fixed therein as the
date of redemption, unless defauit shall be made by the corporation in providing
moneys for the payment of the redemption price pursuant to such notice, all
dividends on the A preferred stock thereby called for redemption shall cease
to accrue, and from and after the date of redemption so specified, unless default
shall be made by the corporation as aforesaid, or from and after the date
(prior to the date of redemption so specified) on which the corporation shall
provide moneys for the payment of the redemption price by depositing the
amount thereof with a bank or trust company doing business in the Borough
of Manhattan, the city of New York, and having a capital and surplus of at
least $10,000,000, provided that the notice of redemption shall state the intention
of the corporation to deposit such amount on a date in such notice specified,
all rights of the holders thereof as stockholders of the corporation, except the
right to receive the redemption price (but without interest), shall cease and
determine. Any interest allowed on moneys so deposited shall be paid to the
corporation. Any moneys «o deposited which shall remain unclaimed by the
holders of such A preferred stock at the end of six years after the redemption
date, shall be paid by such bank or trust company to the corporation.
(&) The B preferred stock at any time outstanding may be redeemed by the
corporation, in whole or in part, at its election, expressed by resolution of the
board of directors, at any time or times upon not less than 60 days’ previous
notice to the holders of record of the B preferred stock to be redeemed, given
as hereinafter provided, at the price of $100 per share and all dividends ac
crued or in arrears (hereinafter called “ the redemption price” ). If less than
all of the outstanding B preferred stock is to be redeemed, the redemption may
be made either by lot or pro rata in such manner as may be prescribed by reso
lution of the board of directors. Notice of such election of the corporation
shall be given by publication in a newspaper of general circulation in the
Borough of Manhattan, the city of New York, such publication to be made not
less than 60 nor more than 90 days prior to such redemption date. A similar
notice shall be mailed by the corporation, postage prepaid, not less than 60 nor
more than 90 days prior to such redemption date, addressed to the respective
holders of record of the B preferred stock to be redeemed at their respective
addresses as the same shall appear on the stock transfer records of the corpo
ration, but the mailing of such notice shall not be a condition of such redemp
tion. Notice having been so given by publication, from and after the date fixed
therein as the date of redemption, unless default shall be made by the cor
poration in providing moneys for the payment of the redemption price pur
suant to such notice, all dividends on the B preferred stock hereby called for
redemption shall cease to accrue, and from and after the date of redemption so
specified, unless default shall be made by the corporation as aforesaid, or from
and after the date (prior to the date of redemption so specified) on which the
corporation shall provide the moneys for the payment of the redemption price

166

STOCK EXCHANGE PRACTICES

by depositing the amount thereof with a bank or trust company doing business
in the Borough of Manhattan, the city of New York, and having a capital and
surplus of at least $10,000,000; provided, that the notice of redemption shall
state the intention of the corporation to deposit such amount on a date in such
notice specified all rights of the holders thereof as stockholders of the corpo
ration, except the right to receive the redemption price (but without interest),
shall cease and determine. Any interest allowed on moneys so deposited shall
be paid to the corporation. Any moneys so deposited which Shall remain un
claimed by the holders of such B preferred stock at the end of six years after
the redemption date shall be paid by such bank or trust company to the cor*
poration.
'
VIII. (a) Except as otherwise provided in this paragraph or as otherwise
made mandatory by law, the holders of record of the A preferred stock and of
the common stock shall exclusively possess voting power for the election of
directors and for all other purposes, and the holders of the B preferred stock
shall have no voting poweir, except that if and whenever four quarter-yearly
dividends on the B preferred stock shall be unpaid in whole or in part, each
share of the B preferred Stock outstanding shall have the same voting rights
as each share of common itock outstanding until all dividends accrued and in
arrears on the B preferred stock shall have been paid or declared arid funds
for the payment thereof sejt aside, and except that the corporation shall in no
case, without either the affirmative vote of the holders of record of a majority
in number of shares of the then outstanding B preferred stock, voting sepa
rately at a meeting called for such purpose, or the written consent of such
holders, authorize any stpck ranking either as to dividends or assets on a
parity with or in priority1to the B preferred stock to a par value exceeding
(including the A preferred stock, if any, at the time authorized and including
S to ck without par value, if any, at the amount of the preference of such stock
on involuntary liquidation) $50,000,000, or increase the authorized amount of
the B preferred stock.
( 6)
At all times each holder of A preferred stock shall be entitled to 10
votes for each full share thereof then outstanding and of record in his name
on the books of the corporation and/or 1 vote for each one-tenth share (rep
resented by fractional certificates for A preferred stock which may at any
time have been issued by ajuthority of the board of directors of the corporation)
thereof then outstanding and of record in his name on the books of the corpo
ration. At all times each holder of B preferred stock which shall at the
time possess voting power upon any matter shall be entitled to one vote for
each share thereof then (hitstanding in his name on the books of the corpo
ration. At all times each holder of common stock shall be entitled to one
vote for each share thereof then outstanding in his name on the books of the
corporation.
IX . No holder of any stock of any class of the corporation shall, as such
holder, have any right to purchase or subscribe for any shares of the capital
stock of the corporation \fhich it may issue or sell, whether out of the number
of shares authorized by tjhe certificate of incorporation of the corporation as
originally filed, or by any amendment thereof, or out of shares of the capital
stock of the corporation Acquired by it after the issue thereof; nor shall any
holder of any such stock :of any class, as such holder, have any right to pur
chase or subscribe for atny obligation which the corporation may issue or
sell that shall be convertible into, or exchangeable for, any shares of the
capital stock of the corporation or to which shall be attached or appertain any
warrant or warrants or any instrument or instruments that shall confer upon
the owner of such obligation, warrant, or instrument the right to subscribe for,
or to purchase from, the corporation, any shares of any class of its capital
stock.
X . Shares of the authorized B preferred stock and common stock may be
issued by the corporation; from time to time for such consideration as may be
fixed from time to time by the board of directors thereof, and any and all such
shares so issued, the full; consideration for which shall have been paid or de
livered, shall be deemed flail paid and nonassessable stock and not liable to any
further call or assessment thereon.

STOCK EXCHANGE PRACTICES

167

E x h ib it B
Victor Talking Machine Co. and subsidiary companies consolidated, balance
sheet December SI, 1927
ASSETS

Current assets:
Cash______________________________________ $4,517,777.28
United States Liberty bonds and Treasury
notes____________________________________ 3,918,643.75
Other marketable securities and call loans_6,419,135.94
Notes receivable—Customers— $349,562.31
Accounts receivable—
Customers_______________ 7,739,529.30
Affiliated companies______
252,233.27
411,473.33
Miscellaneous____________
8,752, 798.21
534,057.61
-------------------Inventories at cost or market, whichever is
lower___________________________________
Less: Reserves___________

8,218,740.60

6,666.367.06
---------------------- $29, 740,664.63
Investment in trust fund for purchase of stock for sale to
employees__________________________________________________
167,110.00
Investment in affiliated companies
(foreign):
The Gramophone Co. (Ltd.)
(on basis of audited balance
sheet of June 30, 1927)__ $7,468,460.13
Less: Amount u n c a lle d
(£425,000)________________ 2,068,262.50
i
---------------------- $5, 400,197. 63
Victor Talking Machine Co. of Canada (Ltd.)
(on basis of audited balance sheet of Dec.
31, 1927)________________________________ 1,996,709.31
Victor Talking Machine Co. of Japan (Ltd.)
(wholly owned), at cost, plus advances—
317,299.04
---------------------7, 714,205.98
Real estate, plant, and equipment:
Land, buildings, machinery,
and equipment; based on
appraisal as at Sept. 30,
1926, plus additions and
less retirements to Dec. 31,
1927____________________ $30, 863, 951.27
Other land, buildings, ma
chinery, and equipment,
not appraised, at cost____
1,052,593.72
------------------------ 31, 916, 544.99
Less: Reserve for depreciation_____________ 7,900,501.07
24,016,043.92
Patent rights and trade names
Matrices_____________________
Prepaid and deferred items__
Total.

1.00
1.00
330, 770.80
61,968,797.33

168

STOCK EXCHANGE PRACTICES
LIABILITIES

. Current liabilities: Accounts payable, provision for Federal in
come taxes, etc_____________________________________________
Beserves: In respect of trade adjustments, employees’ liability
insurance, and contingencies___________ _____________________ _
Capital stock and surplus:
Preferred stock (par, $100 per share) 69
shares outstanding_______________________
$6,900.00
7 per cent cumulative prior preference stock
(par, $100 per share), 201,367.8 shares
outstanding______________________________ 20,136,780.00
$6 cumulative convertible preferred stock
(no par value—preference upon liquida
tion, $100 per share), 121,139.05 shares
outstanding_____________________________ 12,113,905.00
Common stock (no par value), 571,087.45
shares outstanding_______________________ 16,842,415.00

$4,860,378.83
1,231,933.94

49,100,000.00
Plus par value of 6,300 shares 7 per cent
cumulative prior preference stock pur
chased out of earnings through operation
of sinking fund (to be transferred to sur
plus upon formal reduction of stated
capital)_________________________________

630,000.00

Stated capital---------------------------------- 49,730,000.00
Sinking-fund reserve for purchase of 7 per
cent cumulative prior preference stock,
unexpended_____________________________
4,342.86
Surplus________________________________________ 6,142,141.70
----------------------

55,876,484.56

Total___________________________________________________ 61, 968,797.33
The above shares outstanding do not include 1,672.2 shares 7 per cent
cumulative prior preference stock, 975.45 shares $6 cumulative convertible pre
ferred stock, and 4,598.55 shares common stock which are held in the treasury
of the company.
N o te .—

Consolidated statement of income for the year ended December SI, 1927
Sales, less returns and allowances------------------------------------------ $46,886,842.11
Cost of sales, including selling, general and administrative
expenses, etc________________________________________________ 38,658,050.78
Profit from operations after all expenses incident thereto,
but before depreciation of plant and provision for
Federal income taxes-------------------------------------------------Other income_______!__________________________________________

8,228,791.33
1,472,422.71

Deduct depreciation___________________________________________

9,701,214.04
1,576,691.01

Provision for Federal income taxes------------------------------------------

8,124,523.03
855,000.00

Net income carried to surplus account__________________

7,269,523.03

STOCK EXCHANGE PRACTICES

169

Consolidated statement of surplus for the year ended December SI, 1927
Balance at Dec. 31, 1926_________________________$7,525,630. 78
Less:
Transferred to capital upon re
capitalization, Jan. 17, 1927_ $3,373,788.00
Dividend declared and paid
January, 1927, on old stock. 2, 769,749.25
---------------------- 6,143,527.25
---------------------- $1,382,103.53
Add:
Net income for the year ended Dec. 31, 1927, per above con
solidated statement of income____________________________ 7,269,523.03
Adjustment of investment in affiliated companies—The Gram
ophone Co. (Ltd.) and Victor Talking Machine Co. of
Canada (Ltd.)___________________________________________
845,283. 57
Deduct:
Appropriation to reserve for trade adjustments
and contingencies___________________________$550,000.00
Adjustment resulting from acquisition of sub
sidiary company____________________________
6, 779.28
-------------------

9,496,910.13

556, 779.28
8,940,130.85

Deduct!
Appropriation to sinking fund reserve for pur
chase of 7 per cent cumulative prior preference
stock------------------------------------------------------------ 628,020.00
Dividends paid and declared—
483.00
Preferred stock—Year, 1927_______________
7 per cent cumulative prior preference
stock___________________________________ 1,442,649.60
$6 cumulative convertible preferred stock. _ 726,836.55
-------------------

2,797,989.15

Balance Dec. 31, 1927________________________________

6,142,141.70

Victor Talking Machine Co. consolidated balance sheet as of December SI, 1928
ASSETS

Current assets:
Cash______________________________________ $3,747, 777.14
United States Liberty bonds and Treasury
notes, at cost____________________________ 1,616,250.00
Other marketing securities and call loans,
at cost__________________________________ 7,588,988.64
Notes receivable—customers _
$876,425.17
Accounts receivable—
Customers---------------------- 9,044,860.73
Affiliated companies_____
136,918.96
Miscellaneous___________
374,119.53
10,432,324.39
690.770.59
---------------------- 9,741,553.80
%
Inventories at cost or market, whichever
lower____________________________________ 11,139,801.05
---------------------- $33,834,370.63
Less reserve____________

170

STOCK EXCHANGE PRACTICES

Investments in trust fund for purchase of stock for sale to em
ployees--------------------------------------------------------------------------------Investment in affiliated companies
(foreign) :
The Gramaphone Co. (Ltd.)
(in basis of audited balance
sheet of June 30, 1928)____$9,068,150.20
Less amount uncalled (£212,5 0 0 )______________________ 1,031.187.91
---------------------- $8,036,962.29
Victor Talking Machine Co. of Japan (Ltd.)
(on basis of audited balance sheet of
Dec. 81, 1928)______________ ____________
387,643.73
—------------------Real estate, plant, and equip
ment:
Land, buildings, machinery,
and equipment; based on
appraisal as at Sept. 30,
1926, plus additions and
loss retirement to Dec. 31,
1928____ ________________ $31,535,110.19
Other land, buildings, ma
chinery, and equipment,
not appraised, at cost____
3, 086,790.81
------------------------34, 621,901.00
Less reserve for depreciation______________ 9, 792,811.59
---------------------Patent rights and trade names________________________________
Matrices______________________________________________________
Prepaid and deferred items--------------------------------------- -------------Total___________________________________________________

$167,110.00

8,424,606.02

24,829,089.41
1.00
1.00
1,057,304.40
68,312,482.46

LIABILITIES

Current liabilities: Accounts payable, provision for income
taxes, etc--------------------- -------------------------------- -------------------------$7,925,614.29
Notes payable: (Obligation of Canadian subsidiary— represent
ing serial notes maturing at rate of $50,000 a year)--------------930,439,75
Reserves: In respect of trade adjustments, liability insurance,
and contingencies-------------------------- --------------------------------------- 1,076,591.97
Capital Stock and surplus:
Preferred stock (par $100 per share), 69
shares authorized and outstanding---------$6,900.00
7 per cent cumulative prior preference stock
(par $100 per share), 203,040 shares au
thorized; 195,610.8 shares outstanding___ 19,561,080.00
$6 cumulative convertible preferred stock
(no par value— preference upon liquidation
$100 per share) 122,115 shares authorized;
115,700.65 shares exchanged for common
stock in accordance with conversion privi
lege; 5,429.9 shares outstanding--------------542,990.00
Common stock (no par value), 819,915 shares
authorized; 802,505.75 shares Outstanding— 28,413,330.00

----------------

48,524,300.00
Plus—Par value of 5,757 shares 7 per cent
cumulative prior preference stock pur
chased out of earnings through operation
of sinking fund (to be transferred to sur
plus upon formal reduction of stated
capital) ______- ___________________________

Stated capital.

575,700.00

49,100,000.00

171

STOCK EXCHANGE PRACTICES

Surplus: Applied to redemption of 7
per cent cumulative prior prefer
ence stock_______________________ $630,000.00
Sinking fund reserve for purchase
of 7 per cent cumulative prior
preference stock—unexpended —
4,403.95
Unappropriated___________________ 8,646,432.50
-------------------- $9,279, 836.45
---------------------- $58,379,836.45
Total____________________________________________________ 68,312,482.46
Not®.—The above shares outstanding do not include 1,672.2 shares 7 per
cent cumulative prior preference stock, 975.45 shares $6 cumulative convertible
preferred stock, and 4,598.55 shares common stock which are held in the treas
ury of the company.
Consolidated statement of income for the year ended
Sales, less returns and allowances------------------------------------------ $52,064,419.22
Cost of sales, including selling, general and administrative ex
penses, etc.1_________________________________________________ 44,227,239.92
Profit from operations after all expenses incident thereto,
but before depreciation of plant and provision for income
taxes----- .----------------------------------------------------------------------------Other income--------------------------------------------------------------------------

7,837,179.30
2,017,693.32

Deduct: Depreciation---------------------------------------------------------------

9,854,872.62
1,654,854.10

Provision for income taxes.________ ___ _______________ :________

8,200,018.52
876,000.00

Net income carried to surplus_______________ __________

7,324,018.52

Consolidated statement of surplus for the year ended December 81,1928
Balance at Dec. 31, 1927____________________________ _________ _ $6,142,141.70
Add:
Net income for the year ended Dec. 31, 1928, per above con
solidated statement of income____________________________ 7,324,018.52
Adjustment of investment in affiliated companies, less ad
justment in respect of acquisition during the year of the
920,908.37
minority interest in the Canadian subsidiary_____________
Deduct appropriation to reserve for trade adjustments__________

14,387; 068.59
450,000.00
13,937,068.59

Deduct:
Appropriation to sinking fund reserve for pur
chase of 7 per cent cumulative prior prefer
ence stock________________________________ _
$628,020.00
Dividends paid and declared:
Preferred stock—year, 1928______________
483.00
7 per cent cumulative prior preference
stock_____________________ _____________ 1,374,625.35
$6 cumulative convertible preferred Stock184,100.44
Common stock---------------------------------------- 3,104,407.30
-------------------

5,291,636.00

Balance unappropriated at Dec. 31, 1928_____________

8,645,432.50

1 Includes share o f net incom e o f Canadian subsidiary applicable to m in ority in terest
ou tstan din g d u rin g the year.

172

STOCK EXCHANGE PRACTICES
E x h i b i t s N os.

24 a n d 25,

M at

21,1932

R e p o rt on W a r n e r B r o s. P ic tu r e s ( I n c .) , b y S ta n d a rd S t a t is t ic s Co. an d
A n n u a l R e p o r t f o r Y e a r E n d i n g A u g u s t 30,1930, o n W a r n e r B r o s . P i c t u r e s

( I n c .)

(See pp. 628 and 640 of this hearing)
C o m m it t e e E x h ib i t
WARNER BROS. PICTURES

No. 24,

(IN C .), W

21, 1932

17, ANNUAL REPORT SECTION

Revised January 7, 1931
INDIVIDUAL REPORTS SECTION
S t a n d a r d C o p b o r a t io n R e c or d s

[Volume 9, No. 1368. January 21, 1931. Section 7. Copyright, 1931, by Standard
• Statistics Co. (Inc.), publishers, 200 Varlck Street, New York, N. T. Printed In
U. S. A .]
POSITION AND PROSPECT

(Based on annual report for fiscal year ended August 30, 1930, and later infor
mation to date of revision. Any changes based on subsequent data or develop
ments will be published in Bulletin Section (white) W 18, in boldface type,
under “ Digest of position and prospect ” )
Warner Bros, organization is one of the leading producers and exhibitors of.
motion pictures. Growth in the last three years has been rapid, owing in part
to acquisition of First National Pictures (Inc.), Stanley Co. of America, and
other interests, and also resulting from pioneering work in sound and talking:
pictures. Products are distributed throughout the world, principally by Warner
subsidiaries. Control of Stanley Co. of America was acquired in December,
1928, through an exchange of stock, and interest was subsequently increased to
about 97 per cent of total stock outstanding. Control of First National Pictures
(Inc.) was originally acquired in major part through Stanley Co., while late
in 1929 the remaining outstanding interest, placed at 23 per cent, was pur
chased from Fox Film Corporation for $10,000,000 in cash. Soon thereafter a
new company, First National Pictures (Inc.) of Maryland, was formed as a
wholly owned subsidiary of Warner Bros. Pictures to take over entire assets
of the Delaware company.
WIDESPREAD THEATER INTERESTS

Other acquisitions in 1929 included several theater groups, among them the
Silverman and Hoffman chains; also Continental Lithograph Corporation, print-,
ers; and two important music publishers, M. Witmark & Sons (Inc.) and Music
Publishers’ Holding Corporation, operating under the Witmark, Harms, Remick,
and the De Sylvia, Brown, and Henderson names. Theater groups acquired, in
addition to those controlled through Stanley Co. and the Skouras-St. Louis
amusement enterprises in the St. Louis area, increased the aggregate ^Varner
chain to about 350, located mostly in leading eastern cities, while additional
theaters were acquired in fiscal year 1930 (including the Schine chain of about
50 in Ohio), bringin the total to more than 600. Several first-run houses are
operated in New York City, among them the Mark Strand, Warner, and Winter
Garden.
VITAPHONE AND BRUNSWICK

Vltaphone Corporation, a wholly owned subsidiary, is a pioneer in soundpicture development. It is supplied with equipment by Electrical Research
Products (Inc.) (through Western Electric, a unit of American Telephone &
Telegraph Co.). Electrical Research Products receives royalties from its licen
sees, and in turn pays to Vitaphone Corporation for its pioneering efforts 3 per
cent of gross revenues derived from licenses to other motion-picture producers

STOCK EXCHANGE PRACTICES

17a

distributing in the fields and territories covered by license to Vitaphone
Corporation.
During 1930 fiscal year Warner Bros, acquired the phonograph record and
radio departments of Brunswick-Balke-Collender Co. and formed to operate
them the Brunswick Radio Corporation, with headquarters in New York City
and distributing offices at many points in the United States and other countries.
This subsidiary makes “ Panatrope” talking machines, popular-priced radio
receiving sets, combination phonograph and radio receiving sets, records for
talking machines and radio broadcasting, and records for use of Yitaphone
Corporation.
FUNDED DEBT

As stated by balance sheet of August 31, 1930, company had outstanding $42,838,000 10-year optional 6 per cent convertible debentures, due 1939; while mort
gages and other bond issues of subsidiary companies totaled $62,735,000, includ
ing $5,770,000 maturing within one year. Debentures are convertible into com
mon at a rising scale of prices for stock beginning with a basis of 1,078 share
stock for $75 face value of debentures up to September 1, 1932; while holders
have also the option of accepting interest payment in cash or common stock
(one share for each $60 of interest). Debentures were issued to the amount
of $19,205,000 in fiscal year 1929 and balance in 1930, and subsidiary debt dates
chiefly from acquisitions in 1929.
CAPITAL STOCK INCREASED

Growth of interests in last two fiscal years has been reflected both in funded
debt, as above, and extensive issue of capital stock. Company at close of fiscal
year 1930 had outstanding 3,769,(©5 shares, no par common, compared with
2,627,406 a year earlier and 701,720 (giving effect to the two-for-one split during
1929 period) at end of fiscal year 1928. Offering was made to stockholders of
one share for six in February of 1929 and one for four in August, 1930. For
conversion of preferred stock, 345,666 shares were set aside, while otherwise
the expansion has been due to issues for acquiring other companies or interests,
for bankers’ commissions and like purposes.
Preferred is a no par convertible issue, 103,107 shares outstanding; entitled
to dividends at $3.85 per annum since August 31, 1930, when the rate was
advanced from original basis of $2.20. Amount named is a reduction from
785,604 shares issued in 1928 (with 1 share common for 10 preferred), under
agreement for acquisition of Stanley Co. of America control. Stock was con
vertible into common up to September 1, 1930, at one hundred and ten-one
hundred and twenty-fifths of a share common (as split) for one share pre
ferred ; and in major part was converted. Remainder of an issue of class A
stock was retired in December of 1928, after much of it had been converted into
common.
COMMON DIVIDENDS PASSED

Following the two-for-one split of common stock (June, 1929), an initial
quarterly of 75 cents, with 12% cents extra was paid September 1, while the
stock was thereafter on a basis of $4 per annum to and including second quar
ter of 1930. It was announced August 7 of 1930 that dividend had been passed,
action being due to “ current decrease in profits coming at a time of large
capital expenditures.” First quarterly at rate of $3.85 per annum on preferred
was paid December 1, 1930, after regular previous payments at original rate
of $2.20. On former class A stock regular dividends of $1.50 per annum were
paid from issuance in last quarter of 1924 to end of 1925, and nothing thereafter
until redemption in final quarter of 1928 at $17 per share and accrued divi
dends of $4.50. Rights to common in 1929 sold at an average of $3.75, and in
1930 at about $2.
PROFITS REACT IN 1930

Recent expansion has been so radical—notably through acquisition of Stanley
Co. of America in fiscal year 1929 and of First National Pictures completed in
fiscal year 1930—that comparison of business volume from one to another
fiscal period serves mostly as an expansion record. In the fiscal year 1927
consolidated total income was $5,920,000; in 1928 it was $10,287,000; in 1929,

119852—33—APP.----- 12

174

STOCK EXCHANGE PRACTICES

with Stanley Co. of America Included, $31,248,000; and in 1930, with First Na
tional Pictures included, $52,893,000. Net income makes a greatly contrasting
exhibit at only $30,000 for 1927 (after deficits for each of the two years pre
ceding), followed by $2,045,000 for 1928, $17,272,000 for 1929 and a reaction to
$7,075,000 in 1930. In examining the figures for explanation of this remarkable
drop in 1930 net, the outstanding factor at once evident is a total charge of
$37,037,000, for depreciation and amortizing, compared with $12,134,000 in 1929
period and $7,013,000 in 1928. This more than tripling of capital extinguish
ments, with about a 70 per cent increase in total income, was explained officially
as due to amortization of First National Pictures film and amortizing and
depreciation on newly acquired theater properties, together with an addtional
amount of depreciation on fixed assets resulting from increase in deprecation
rates. Another 1930 factor was $1,409,000 “ special adjustment of released film
inventory ” ; while a large addition to interest charges also contributed.
EARNINGS PER SHAKEI

On preferred stock company earned $59.96 per share in fiscal year 1929 (year
of issue) and $68.61 in 1930; amounts outstanding having been greatly reduced
by conversion in each year. Balance available for common was equal to $2.27
per share in fiscal year 1930, compared with $6.33 in 1929, $1.86 in 1928, and
3 cents in 1927; ratios for two years last named adjusted for two-for-one split
and conversion of class A stock into common in 1929 period.
f i n a n c i a l p o s it io n

Current assets at end of 1930 fiscal year totaled $42,498,000, including $30,703,000 inventories, of which $24,020,000 consisted of film and Vitaphone prod
uct released, unreleased, and in production (released product carried at cost
less amortization). Cash was $5,133,000, while notes receivable were reported
of $1,163,000, and sundry other receivables at a total of $5,280,000. Total of
current liabilities was $27,012,000, including $2,864,000 notes payable to bafnks
and others, and net working capital was $15,487,000. This latter amount com
pared with $14,735,000 a year earlier and much smaller amounts in previous
years, the 19-28 year-end figure being $1,063,000. That no greater increase was
shown for 1930, though during the year First National Pictures had been
brought into the consolidated statement and company had raised cash by stock
financing was explained chiefly by the large cost of expansion and the drastic
First National Film write off noted in connection with earnings. Total assets
were stated at $230,185,000, including good will valued at $8,418,000, and an
item of $989,000 for unamortized bond and note discount Surplus was
$11,027,000, and with intangibles omitted the book value applicable to common
stock: was $83,847,000, or $22.25 per share.
NEW FISCAL YEAR EARNINGS

Net income in first quarter of 1931 fiscal year (three months ended November
30,1930) approximated $2,000,000, against $5,629,000 earned in like period of the
previous year. This expected showing was more favorable than appeared on
the surface, since the reduced but substantial profit for November quarter was
in contrast with an indicated loss of about $4,700,000 recorded for three months
ended August 31, 1930, final quarter of 1930 fiscal year. Amount last named is
the difference between net income of $11,765,000 for 39 weeks ended May 31,
1930, and of $7,064,000 only for the entire year. This adverse result in late
months of the 1930 fiscal period was a reflection of several factors including
the general state of business, normal decrease of theater attendance in summer
months, additional large depreciation and amortization charges, and expense
incident to acquisition of numerous theaters and fitting them into the reorgani
zation. Depreciation and amortzing charges had been heavy in first three quar
ters of 1930 fiscal year, in fact about three and one-half times the figure for like
period of fiscal year 1929, with the result that net income had shown only a
small gain though gross had more than doubled; but in the last three months
company charged off $10,511,000 to these accounts as against $4,528,000 in
corresponding 1929 period.

175

STOCK EXCHANGE PRACTICES
OUTLOOK

Aside from evidence that company had turned the corner after a period of
exceptional difficulty, no very definite forecast was possible at close of the
calendar year 1930. Company was still engaged in working out a variety of
problems, dominant among them being the efficient coordinating of many theater
units recently acquired, the further development of sound pictures with some
special reference to foreign fields in which various experiments were being
conducted, and effectiveness of phonographs and records, radio, “ home movie,”
and music publishing activities through subsidiaries.
Expansion in 1930 fiscal year included the acquiring of 257 theaters. While
much of it was effected through direct use of shares for exchanges, etc., this
growth resulted also in a large draft upon liquid resources as augmented by
sale of common stock through the August offering. Much in the way of nomi
nal working capital, consisting of film inventory, disappeared through write-offs.
Working-capital position at end of 1930 fiscal year was not stronger than re
quired for the extensive business being conducted. Company’s policy in ceas
ing aggressive expansion and passing dividends was in line with this situation
and the numerous difficulties still to be faced in coordinating theaters, etc.
Patent situation is favorable, Warner Bros, being now in position of sharing in
royalties paid by almost all others in its field, both at home and abroad. An
other favorable aspect is recent marked gain in export business.
S t a n d a r d S t a t i s t i c s Co. ( I n c . ) .
A n n u a l R eport

Main office, 321 West Forty-fourth Street, New York City; corporate office, 7
West Tenth Street, Wilmington, D el.; transfer office, preferred, Manufacturers
Trust Co., New York; common, New York Trust Co., New York; registrar, pre
ferred. Guaranty Trust Co., New York; common, Manufacturers Trust Co., New
York.
Annual meeting, second Monday in December at Wilmington, Del.
Listed, preferred and common, New York Stock Exchange.
Fiscal year ends last Saturday in August.
Certification of accounts: Company’s reports certified by Price, Waterhouse
& Co., certified public accountants, New York.
Underwriters: The offering of $19,205,000, 6 per cent convertible debentures
in September, 1929, was underwritten by Goldman, Sachs & Co., New York City.
Common stock offering in August, 1930, was underwritten by Goldman, Sachs
& Co. and Hayden, Stone & Co., both of New York City. Entire offering was
subscribed for by stockholders.
c a p it a l iz a t io n

N o t e .—Details of funded debt and current amounts of authorized and out
standing capital stock (preferred and common) published in Bulletin Section
(white)— W 18. All stock is fully paid and nonassessable, and no personal
liability attaches to stockholders.

Summary of authorized capital stock
Number of shares

Preferred Glass A
(no par) (par $10)

Apr. 4,1923, original authorization . . .
Dec. 23, 1924, changed to___ ____ _____________________________
Dec. 4* 1928, changed to.......................................................................
21,June
1929, changed to ..
.............................

Capital
stock
(no par)

Common
(no par)

500,000
200,000
785.604
786.604

550,000
2.500.000
7.500.000

176

STOCK EXCHANGE PRACTICES
Purposes of stock issuance
Number of shares
Class A
(par $10)

Dec. 31,1923, to acquire partnership business of the 4 Warner brothers.............
1923 to 1924, for cash........................................................................................................
Dec. 31,1924, exchanged for common, share for sh are..,....................................... .
1926, for cash........................................................................................................ ........... .
April, 1926, to Dec. 1, 1928, for conversion of class A on a share for share basis.

>300,000
i 31,190
»17,313
182,687

ShareS outstanding Dec. 10,1928 (for details see above)....................................................
Stock issuable in exchange for 785,603.3 common shares (86 per cent) of Stanley Co. of
America deposited pursuant to an exchange agreement dated Oct. 2, 1928, in the
ratio of 1 preferred and one-tenth common shares for each Stanley common. Ac
cording to the agreement the deposit committee was to sell to Ooldman, Sachs & Co.
20 per cent of the preferred ana common Warner stock received by them at $11.50
per unit of two-tenths preferred and two one-hundredths common shares and dis
tribute the cash thus received pro rata to Stanley stockholders who deposited their
stock. Thus Stanley stockholders would receive for each share deposited eighttenths preferred and eight one-hundredths common Warner shares and $11.50 in
cash.
Issuable to Ooldman, Sachs & Co., the corporation's bankers as compensation for
underwriting the purchase agreement dated Oct. 2,1928, and for their past services
to the corporation....................................................................................................................
Issuable in exchange far 60,000 out of 60,006 class B shares of Skouras Bros. Enter
prises (Inc.) of St. Louis and 13,929 class B shares of St. Louis Amusement Co., a
subsidiary of Skouras Bros. Enterprises (Inc.).................................................................
Issuable as part consideration to Renraw (Inc.), under terms of an agreement dated
Sept. 1,1928, which provides among other things for the services of Messrs. Harry
M . Warner, Albert Warner, and Jack L. Warner for 6 years, and extends for a period
of years the payment of the corporat’on’s indebtedness to Renraw (Inc.), in excess
of $6,000,000................................................................................................................................
Issuable for cash, to be used in liquidation of indebtedness of the company and its
subsidiary, Stanley Co. of America, to reimburse the corporation for recent acqui
sitions, including all stock of M . Witmark & Sons (Inc.), a majority of stock of
Continental Lithograph Corporation, and all stock of 321 West Forty-fourth
Street (Inc.), and to improve cash position—this stock was offered to commonstock holders of record Feb. 25, 1929, at $100 per share, to extent of 1 new share
for each 6 shares held. Rights expired Mar. 20, 1929, and the offering was under
written at $100 per share to extent of 147,000 shares.........................................................
Issuable for additional common stock of Stanley Co. of America in ratio of 1 com
mon share of Warner Bros, for each 3 common shares of Stanley.................................
Issued to replace stock borrowed for delivery against acquisition of 1,000 shares of
common stock (the outstanding minority interest) of Stanley-Mark-Strand Cor
poration......................................................................................................................................
To give effect to 2-for-l split of common stock, upon official notice of issue (a) of 1
share with respect to each share outstanding June 27, 1929, (6) to give effect to
proportionate increase in conversion ratio of preferred stock after effective date of
split, and/or (c) upon consolidation of fractional scrip after June 27, 1929................
Issuable in exchange for all outstanding capital stock of Music Publishers’ Holding
Corporation...............................................................................................................................
Issuable in exchange for 1,000 shares (the outstanding minority interest) of common
stock of Stanley-Crandall Co. of Washington........................................... ......................
Issuable in exchange for property of Connecticut River Valley Corporation................
Issuable in exchange for property controlled by Silverman Bros.....................................
Reserved for conversion of preferred stock........: ...................................................................
Shares issuable for conversion of optional 6 per cent convertible debentures, series
due 1939.
Issuable in payment of interest on optionable 6 per cent convertible debentures____
Issuable in exchange, share for share, for 27,903 shares (the outstanding minority
interest) of common stock of Stanley Co. of America. ...................................................
Issuable in exchange for properties and assets of 2 theaters located in West Virginia.
Issuable for certain properties throughout the United States...........................................
For outstanding minority interest of Stanley-Davis-Clark Corporation, a subsidiary.
For cash (rights at $20 a share on 1 for 4 basis)—offering was entirely subscribed for
by stockholders........................................................................................................................

18,810

200,000

Number of shares outstanding as of Dec. 10,1928.

Purposes of issue (for which application has been made to list)

Common
(no par)

560,000
Number Number
of pre par shares,
common
ferred
660,000)

785,604

78,561
50.000
31.000

90.000

164,0601
39,786i

8,000

1,357,062
140,364
4,800
18,182
26,600
>345,666
617,521
<448,419
>27,903
4,666
265,212
1,848
753,842

Total shares issuable........................................................................................................

785,604 >4,960,786

Total shares issued and outstanding Aug. 30, 1930.

103,107

3,769,026

i Designated “ capital stock.”
> 17,313 shares of treasury stock (common) so acquired were reissued prior to Mar. 31,1925; 13,190 shares
for cash and 4,123 shares for services.
> As prior to 2-for-l split effective June 27, 1929. Conversion basis then changed accordingly.
< In lieu of interest due Mar. 1, 1930, company issued 9,251.5 shares.
< Of which 18,659 shares not used, as previously authorized.
> Excludes 23,106 shares which wore canceled.

177

STOCK EXCHANGE PRACTICES
Rights to stockholders

Stock of
record

Rights ex
pired

Ratio of
offering

Subscrip
tion price

Ex-date
High

Feb* 25,1929
Aug* 25,1930

Mar. 20,1929
Sept. 15,1930

1 to 6
1 to 4

$100
20

Closing price,
ex-date.

Range of
rights
Low

474
3

294 Feb. 25,1929
7A Aug. 25,1930

Stock
124H
24*4

Rights
4H
m

BASIS OF ISSUANCE OF COMMON IN CONNECTION WITH CONVERSION OF OPTIONAL 6
PER CENT CONVERTIBLE DEBENTURES AND IN LIEU OF INTEREST

Interest on the optional debentures is payable March 1 and September 1 in
•cash or common stock and/or scrip, if in stock, originally at rate of one-fourth
share for eaeh $15 of interest, but because of offering of common to holders of
August 25, 1930, rate was changed to 269/1000 share for each $15 of interest.
Optional debentures were originally convertible into common stock at the rate
of one share common for each $75 principal amount of debentures prior to
September 1, 1932; at the rate of one share for each $80 principal amount of
debentures prior to September 1, 1935; and at the rate of one share common
for each $85 principal amount of debentures prior to August 26, 1939; as result
of offering of common stock to holders of record August 25, 1930, rate was
changed to 1,078/1,000 shares instead of one share, the other provisions remain
ing the same.
STOCK PROVISIONS

Preferred.—Preferred over common both as to dividends1and assets. Entitled
to cumulative dividends, payable quarterly, December 1, etc., at the rate of
$2.20 per share per annum, and no more, until August 31, 1930, inclusive, and
thereafter at the rate of $3.85 per share per annum, and no more. In liquida
tion or dissolution, whether voluntary or involuntary, entitled to $55 per share
and accrued dividends. Coricertible into common stock on or before September
1, 1930, in the ratio of 110/125 of a common share for each preferred. (In
connection with 2-for-l split effective June 27, 1929, conversion ratio was
changed accordingly.) Redeemable in whole or in part at any time upon 60
days’ notice at $55 per share and accrued dividends; such stock as may be
redeemed or converted must be retired and the authorized capital stock reduced
accordingly.
Rights to subscribe.— Preferred and common-stock holders are not entitled to
subscribe for any new or additional issues of stock or of any securities con
vertible into stock except that common-stock holders may subscribe to common
stock issued in excess of 550,000 shares outstanding as of December, 1928, where
the consideration is cash.
Voting power.—Preferred-stock holders have not voting power in respect to
election of directors except upon default of four quarterly dividends (whether
consecutive or not) payable after September 1, 1930, they shall then have the
right to elect a majority of the board of directors.
After September 1, 1930, the consent of at least two-thirds of the preferred
stock is necessary to increase the authorized amount of preferred stock, to
change any of the provisions referring to the rights or preferences of the
preferred stock, and to sell or convey all or substantially all of the property
or business of the corporation to another company unless the entire capital stock
of the latter is owned.
No mortgage, lien, or charge of any kind shall be created after September 1,
1930, upon any of the real estate of the corporation for an amount in excess
of 70 per cent of the fair value of all property subject to such mortgage, lien, or
charge except for the refunding or extension of existing mortgages, liens, or
charges and except for purchase money mortgages, unless two-thirds of the
preferred-stock holders shall have failed to file notice of their objections within
20 days after notice of the corporation’s intention to create such mortgage, lien,
or charge shall have been mailed.
NUMBER OF COMMON-STOCK HOLDERS

Nov. 7,1930.
Dec. 2,1929.

26,990
11,157

178

STOCK EXCHANGE PRACTICES
High and low prices of stock
[New York Stock Exchangel
Common1

Preferred1
High
1930............................................................................................................

Low

1929........................................................................................................

70H
59*4

1928............................................................................................................

57H

1928............................................................................................................
1927............................................................................................................
1926............................................................................................................
1925...........................................................................................................
1924............................................................................................................

Low

High

31
f
25h \
5m

80J4
MH
*134
139H

9%
30
*97
80J4

Class A * (New
York Stock Ex*
change)

Common (New
York Curb)

High

Low

>139^
45fe
09U
4 22%

• 22
18*4
12
<15

Low

81)4
3394
65
ISH
12H

13%
m
8
13K
7

i Common stock listed on the New York Stock Exchange Aug* 22,1928, and preferred stock listed on the
New York Stock Exchange Dec* 12, 1928*
* Before 2 for 1 stock spUti
> Entire outstanding class A stock called for redemption Deci 1, 1928, at $17 per share and accrued
dividends of $4*50.
< Listed on the New York Stock Exchange Aug. 12,1925, and stricken from list Dec* 3, 1928,

Approximate dividend dates
Dividend meetings (preferred),0 January, April, July, October.
Ex-dividend (preferred), February 10, May 10, August 10, November 10.
Dividends payable (preferred), March 1, June 1, September 1, December 1.
Dividends paid in calendar years since organization1
Preferred
1930...................................................................................................................
1929....................................................................................................................
1926-1928..................................................................................... ....................
1925....................................................................................................................

1 $2.61J4
*2.75

Common

Class “ A ” *

<$2.00
•1.87H
**L »

i Dividends paid during current calendar year reported in current dividend sections.
* Entire class A stock was called for redemption Dec. 1, 1928, at $17 per share and accrued dividends of
$4.50. Holders of class A had right to convert into common, share for share, before Dec. 1, 1928.
> Annual rate incresed from $2.20 to $3.85 (in accordance with stock provisions) by payment of a quarterly
dividend of 96H cents on Dec. 1,1930.
< Last common payment prior to date of revision was $1 on June 2,1930.
* Initial of $1.10 paid Mar. 1, 1929, covering 2 quarters ending that date.
* Initial quarterly of 75 cents and an extra of 12H cents paid Sept. 1, 1929; quarterly of $1 per share paid
Dec. 1 1929.
7 Initial of 37H cents paid Jan. 31, 1925.

8 No fixed date set for dividend a<ftion. Directors meet the third Thursday of each
month. Dividend action usually is taken of the third Thursday of the months indicated
above.

179

STOCK EXCHANGE PRACTICES
F in a n c ia l S t a t e m e n t s
DEPRECIATION POLICY

Fixed assets of the company and its subsidiaries are depreciated at annual
rates based upon the estimated years of life of various classes of assets, as
follows:
Per cent

3-10
Building______________________
Equipment____________________ 15-38
Pianos, organs, and properties— 15-33

Per cent

Furniture and fixtures_________ 10-33
Service buildings and ma
chinery____________ _________ 10-25

Capital expenditures in connection with theater buildings and equipment on
leaseholds are amortized over the terms of the leases.
Costs of producing motion-picture negatives are amortized over a period of 88
weeks from the date of release in the United States, as follows:
Per cent

After 6 weeks________________ __
After 16 weeks_______________ __
After 40 weeks_______________ ___

20
50
80

Percent

After 59 weeks__________________ 90
After 88 weeks__________________ 100

The positive film costs are written off in one year, as follows
Per cent

After 6 weeks___________________
After 16 weeks__________________
After 28 weeks__________________

23
58
81

P ercent

After 40 weeks__________________ 91
After 52 weeks__________________ 100

Seven-and-five-twelfths-year analysis of consolidated income account
[W arner Bros. Pictures (Inc.) and subsidiary companies— F irst National Pictures
(Inc.) consolidated for first time in 1930— Based on comparative consolidated income
account.]
Deductions other
than interest
Total
income

Deprecia
tion and
amortiza
tion

ifear ended Aug. 30,
1930............................. i $52,892,841 $37,036,852

Operating
income

fears ended Aug. 31,
1929........................ $31,248,270
1928......................... 10,286,684
fear ended Aug. 27,
1927............................
5,919,935
5 months ended Aug.
28, 1926......................
2,082,147
Year ended Mar. 27,
1926................ r..........
3,320,153
Years ended Mar. 31,
1925......................... 1 1,161,901
1924.........................
7101,609

Other
income

Miscella
neous

Available
for
interest

Interest

$3,283,142 $12,790,401 >$5,477,869

Total
income

Interest,
minimum Deprecia
tion and
interest,
and mis amortiza
tion
cellaneous
charges

Interest
times
earned

2.33

Federal
taxes

Net
income

$7,074,621

Net
income

>$31,248,270 >$2,914,009 $12,134,056 $2,288,200 4$17,271,805
(»)
2,044,842
7,012,784
165,000
$90,485 10,377,169 *1,154,543
5,919,935

785,372

5,104,136

30,427

159,758

2,241,905

304,946

2,216,055

« 279,096

-35,942

3,284,211

504,532

4,117,505

242,929
222,447

1,404,830
124,056

120,879

(0
(0

•1,337,926
182,000
21,243

1,101,951
102,813

i Includes $562,539 other income.
* Indudes $1,515,717 interest on optional 6 per cent convertible debentures, which amount is after de
ducting $278,718 interest accrued to dates of issue. A t election of noteholders, of interest payable Mar. 1,
1830, $21,060 was paid in cash and balance by subsequent issuance of 9,251.5 shares of common stock.
> Other income in 1929 is deducted from interest, minority interest, and miscellaneous charges.
* Includes $602,623 equity in undistributed earnings of affiliated companies (not consolidated) from dates
of acquisition to Aug. 31,1929; and $2,757,177 equity in earnings of affiliated companies (consolidated) from
Sept. 1,1928, to dates of acquisition, and equity in earnings for year applicable to additional shares common
stock of First National Pictures (Inc.), acquired subsequent to Aug. 31, 1929.
* Indudes $115,000 provision for contingencies.
* Deficit.
t Depreciation is deducted before showing operating income.
After deducting minority interest.

180

STOCK EXCHANGE PRACTICES

Sevcn-and-five-twelfths-year analysis of consolidated income account— Con.
Preferred stock dividends
declared

Common stock dividends
declared

Total
amount

Per
share

Class A
stock
dividends
Earned
paid
per
snare

Year ended Aug. 30, 1930___ $402,740
Years ended Aug. 31:
1929........ . ........................... 761,672
1928.....................................
Year ended Aug. 27, 1927___
8 months ended Aug. 28,1926
Year ended Mar. 27, 1926___
Years ended Mar. 31:
1926 ............................ .......
1924.....................................

$2.20

$68.61

$8,080,380

2.20

89.96

2,127,507

Total
amount

Per
share

Surplus
after
Earned dividends
per
share1

$3.00 •$2.27 •$1,408,499
•6.33 14,382,628
2,044,842
4.98
30,427
•.77"
•279,096
•1.16
•4.68 •1,662,805

w.87^

$224,979

1,087,208
102,813

2.89
3.30

14,743

• Deficit.
•After allowing for dividends on class A stock outstanding in 1928 and prior years.
•As part of the preferred stock issued in 1928 was converted into common stock, the earnings per com
mon share are shown after allowing for full year’s dividend requirements on preferred stock outstanding
at the end of the year.
“ Includes an extra dividend of 12H cents a share.
ADJUSTED EABNINGS PEB SHAKE

Adjusted to reflect the conversion of class A stock into common stock on a
share-for-share basis in December, 1928, and two for one common stock split
in July, 1929:
Aug. 30,
1930
Number of common shares
adjusted_____________________
Earnings per adjusted common
sh«re..........................

...........

Aug. 31,
1929

Aug. 27,
1927

Aug. 31,
1928

Aug. 28,
1926

Mar. 27,
1926

Mar. 31,
1926

3,015,541 % 627,406 1.100^000 1,10^000 i,io a o o o i,io a o o o 1,100,000
>$2.27

1 $6.33

$1.86

$0.03

«$0.25

>$1.23

$1.00

1 As part of the preferred stock issued in 1928 were converted into common stock, the earnings per com
mon share are shown after allowing for full-year dividend requirements on preferred stock outstanding at
the end of the year.
* Deficit.

Comparative consolidated income account
i Warner Bros. Pictures (Inc.) and subsidiary companies—First National Pictures (Inc.) consolidated for
first time in 1930]
Year ended
Aug. 30,1930

Aug. 31,1929

Aug. 31,1928

Aug. 27,1927

Gross income__________________________
Cost of sales___________________________
Depreciation__________________________
Selling and general expenses___________

0)
0)
(‘)
(i)

(l)
(i
(*)
(>)

0)
i)
(*)
(1)

(»)
0

Operating income_______________
Other income_________________________

$52,340,302.00
552,539.00

$31,24& 270.00

$10,286,684.00
9a 485.00

$5,919,935.00

52,892,841.00

31,248.270.00

ia 377,169.00

5,919,935.00

Total income............................. .......

(i)

l Not reported
2 For year ended Mar. 31, 1927, and subsequent thereto, depreciation is included with
amortization and listed under “ deductions,” and in 1925 depreciation is included with
42ost of sales.
* Other income in 1929 is deducted from interest and miscellaneous charges.

181

STOCK EXCHANGE PRACTICES
Comparative consolidated income, account—Continued

IWaraer Bros. Pictures (Inc.) and subsidiary companies—First National Pictures (Inc.) consolidated for
first time in 1030]
Year ended
Aug. 30,1930

Aug. 31,1929

Aug. 31,1928

Aug. 27,1927

Deductions:

5 $1,515,717.00
J
3,962,152.00 }s $2,591,929.00
Other interest......................................
| $1,039,543.00
748.848.00
Miscellaneous charges........................
1
322,060.00
237.911.00
Minority interest................................
Amortization........................................ } 37,036,853.00
12,134,056.00
7,012,784.00
Depreciation........................................
115,000.00
Special adjustment of released film
1,409,294.00
1,125,000.00
Provision for Federal taxes...............
2,288,200.00
165,000.00

$775,735.00
9,637.00
5,104,136.00

Total deductions..............................

46,035,774.00

17,336,265.00

8,332,327.00

5,889,506.00

Balance..............................................

6,857,067.00

13,912,005.00

2,044,842.00

80,427.00

217,554.00

602,623.00

Net income.......................................
Preferred dividends_______________
Common dividends_______________

7.074.621.00
402,740.00
8.080.380.00

17,271,805.00
761,672.00
2,127,597.00

2,044,842.00

30,427.00

Surplus after dividends..................
Previous surplus.................................

1 1,408,499.00
12,435,878.00

14,382,626.00
810,429.00

2,044,842.00
• 1,234,413.00

30,427.00
*1,264,840.00

Total surplus.................................
Equity in earnings of affiliated
companies from Sept. 1, 1928, to
to the dates of acquisition and
equity in earnings for the year
applicable to additional shares of
common stock of First National
Pictures (Inc.), acquired subse-

11,027,379.00

15,193,055.00

810,429.00

8 1,234,413.00

Surplus as per balance sheet.........
11,027,379.00
Earned per share:
Preferred stock____________________
68.61
Class A stock_____________________
.... ................................ Common7*2.27
stock

12,435,878.00

810,429.00

•1,234,413.00

10.27
4.98

.15
* .77

Add:
Equity in undistributed earnings
of affiliated companies from date
Equity in earnings of affiliated
companies from Sept. 1, 1928, to
the dates of acquisition and
equity in earnings for the year
applicable to additional shares
of common stock of First Na
tional Pictures (Inc.) acquired
2,757,177.00

2,757,177.00

59.96
'6.33

1 Not reported.
8 Other income in 1929 is deducted from interest and miscellaneous charges.
5 This amount is after deducting $278,718 interest accrued to dates of issue. A t elec
tion o f noteholders, of interest payable Mar. l , 1930, $21,060 was paid in cash and the
balance by subsequent issuance of 9,251.5 shares o f common stock.
• Deficit.
7 As part of the preferred stock issued in 1928 were converted into common stock, the
earnings per common share are shown after allowing for full year dividend requirements
on preferred stock outstanding at the end o f the year.
8 Based on shares outstanding Aug. 30, 1 9 3 0 ; on average shares outstanding during
year, earnings were equal to $2.44 a snare, and on shares outstanding after sale o f 753,484
common shares earnings were equal to $1.77 a share.

182

STOCK EXCHANGE PRACTICES
Comparative consolidated income account—Continued
5 months end
ing Aug. 28,
1926

Years ended
Mar. 27,1926
$8,657,825.00
1.946.289.00 }
(*)
3.391.383.00

Mar. 31,1925
$4,549,713.00

Gross income__________________________________________
Cost of sales___________________________________________
Depreciation___________________________________________
_
Stalling *nd gnnprftl expenses .
. ........... .

0)
0
(*)
(*)

Operating income . _
______ ___________
Other income__________________________________________

$2,082,147.00
159,768.40

3,320,153.00
* 35,942.00

1,161,901.00
242,929.00

Total income____________________________________
Deductions:
Other interest_____________________________________
Minority interest__________________________________

2,241,905.00

3.284.211.00

1,404,830.00

304,173.00
773.00

492,382.00
12,150.00

120,310.00
569.00

2 ,216,055.00

f ..........................
4.117.505.00
1
(>)

2,521,001.00

4,622,037.00

302,879.00

Depreciation_______________________________________
Provision for Federal taxes_________________________
Total deductions________________________________

}

2,555,474.00
832,338.00

182,000.00

Balance.____ ____ _____________ ___________Net income____________________________________________
Class A dividends_________________________________

« 279,096.00

<279,096.00

•1,337,826.00
•1,337,826.00
224,979.00

1.101.951.00
1.101.951.00
14,743.00

Surplus after dividends__________________________
Previous surplus___________________________________

« 279,096.00
• 985,744.00

•1,562,805.00
1,190,021.00

1,087,208.00
102,813.00

Total surplus____________________________________
Surplus adjustments_______________________________

*1,264,840.00

•37% 784.00
0)

1,190,021.00

Surplus as per balance sheet______________ _______
Earned per share*:
Class A stock______________________________________
Common stock_____________________ I_____________

«1,264,840.00

•985,744.00

1,190,021.00

•1.40
•1.15

•6.69
•4.68

5.51
2.89

1 Not reported.
1 For year ended Mar. 31,1927. and subsequent thereto, depreciation is included with amortization and
listed under “ deductions,” and in 1925 depreciation is included with cost of sales.
< Debit.
* Deficit.

Large depreciation and amortization item explained.—December 10, 1930,
learned this company had prepared a letter for stockholders in answer to
numerous requests for explanation of items in financial statement for fiscal year
ended August 1,1930, particularly with respect to increased charges for interest
and amortization. Letter said in part: “ Caption *amortization and deprecia
tion’ in consolidated statement of profit and loss includes amortization of
negative and positive film cost and sound recording, amortization of leaseholds
and depreciation of buildings, plant, and equipment, including those of Bruns
wick Radio Corporation and other acquired subsidiaries. Increase in amortiza
tion and depreciation over previous fiscal year is explained by the amortization
of First National Pictures (Inc.) film and amortization and depreciation on
newly acquired theater properties, together with an additional amount of de
preciation on fixed assets resulting from an increase in rates of depreciation.”

183

STOCK EXCHANGE PRACTICES
Comparative income account (Warner Bros. Pictures {Inc.) only)
[As reported to the New York Stock Exchange, latest available]

5 months
ended
Aug. 28,
1926

Years ended
Aug. 31,
1929

Aug. 31,
1928

Aug. 27,
1927

$8,567,144
90,485

$5,021,187
92,299

$1,827,489
159,758

18,978,753

8,657,629

5,113,486

1,987,247

5,931,569
127,331

4,601,955
557,603

2,103,541
224,003

1,845,000

5,671,873
532,617
115.000
165.000

7,903,900

6,487,490

5,159,558

2,327,544

Net income________ ____________________________ 11,074,853
............. ................................
Previous
.........
surplus
.....
885,017

2,170,139
»678,786

146,072
i 632,714

140,297
1292,417

Total surplus________________ __________________ 11,959,870
Less:
Dividends paid_______ ________ __________________
2,889,178
Dissolution of subsidiary company______ _________
89,979
Adjustment on account of losses of prior years of
Metropolitan Theater Co_________________ _____
Adjustment on account of Vitaphone Co. of Amer
ica (Inc.), dissolved June 29,1928.............................
Profit and loss surplus___________________________ 8,980,713

1,491,353

> 678,786

1632,714

* 678,786

1632,714

Operating jnfinmA ,
$18,978,753
'Other income__ ______________ ______ __________ _____
Total income________ ______ ____________________
Deductions:
Amortization and depreciation_____ ______ _______
Tpterast. and TnjscfillflTlfiO” s charges. . .
Provisions for contingencies._____ _______ ________
Provisions for Federal taxes..........................................
Total deductions............... ......... ...............................

42,632
563,704
885,017

i Deficit.

Comparative consolidated quarterly earnings (Warner Bros. Pictures (Inc.)
and subsidiary companies)
(Warner Bros. Pictures (Inc.), and subsidiary companies)
[ N o t e — The addition ol quarterly reports will not coincide with the annual figures for year ended Aug. 30,

1930, because of the loss shown in fiscal quarter. For future comparative purposes no adjustment can be
made of taxes reserved in first three quarters]

Quarters
ended—

Nov. 30, 1929...
Dec. 1,1928.......
Nov. 26, 1927...
Nov. 27, 1926...
Mar. 1, 1 9 3 0 ..Mar. 2, 1929___
Feb. 25, 1928—
Feb. 26, 1927....
M ay 31, 1930___
June 1, 1929.......
M ay 26,1928___
M ay 28, 1927—
Aug. 30, 1930 7 Aug. 31, 19291..
Aug. 31,1928 7 ..
Aug. 27,19271- -

Operating
income1

Interest and
Total income miscellaneous
charges

Federal
taxes
(approxi
mate) 2

$7,566,358.00 $7,566,358.00 $1,315,613.00 $728,500.00
3.564.232.00 2.572.930.00
250.205.00 405,000.00
371.569.00
371.569.00
268.882.00
7,288.00
40.192.00
40.192.00
149.277.00
6,636,634 00 6.636.634.00 1.422.301.00 643.500.00
1.515.776.00 1.569.852.00
770.644.00 518.500.00
771.595.00
771.595.00
263.009.00
36,069.00
57.930.00
57.930.00
156.902.00
3.431.346.00 3.431.346.00 1.392.611.00 243,000.00
5.956.143.00 5.893.370.00
793.204.00 731,100.00
655.452.00
745.937.00
233.175.00
36,392.00
331.155.00
331.155.00
222.065.00
• 2,339,888.00 8 1,778,349.00 3.502.294.00
5.078.062.00 5.078.062.00
777.876.00 633,600.00
1.475.284.00 1.475.284.00
274.387.00
85,231.00
386.522.00
386.522.00
257.129.00

Earned per
share3
Net income

Pre
ferred
stock

*$5,629,108.00 $20.90
2.917.724.00
<95,399.00
>109,085.00
4,463,000.00
18.04
4 4,336,846.00
11.90
*472,407.00
*98,972.00
1.673.156.00
16.02
4 4,703,190.00
13.03
*476,37ft 00
109.090.00
*5,280,643.00 *51.22
4 5,314,045.00
18.45
*1,115,666.00
129.393.00

Com
mon
stock
$2.07
2.65
.09

*.10

1.62

2.10

.43
*.09
.56
1.90
.43

.10

*1.77
1.96
1.01

.12

1 Operating income is reported after deducting depreciation and amortization.
1 Federal taxes were not reported quarterly by the company for year ended Aug. 31, 1928. The amount
deducted in annual report was $165,000;t his amount has been pro rated quarterly according to amount
shown as earned in each quarter before taxes.
8 Based on 269,327 preferred and 2,645,864 common shares in November, 1929,247,343 preferred and 2,666,211 common shares m March, 1930, 104,473 preferred and 2,871,182 common shares in May, 1930, 103,107
preferred and 3,015,511 common shares in August, 1930, 288,056 preferred and 2,627,406 common shares in
August, 1929, 360,987 preferred and 2,371,652 common snares in June, 1929, 364,357 preferred and 1,969,818
common shares in March, 1929 (adjusted to give effect to 2 for 1 common-stock split, July 2, 1929), and on
1,100,000 common shares in prior periods (adjusted to give effect to conversion of class A stock into common
stock, on share-for-share basis, Dec. 1,1928) and 2 for 1 stock split in July, 1929.
4 Includes equity in earnings of affiliated companies prior to date of acquisition amounting to $217,554
in Nov. 30,1929, $905,741 for quarter ended Mar. 2,1929, $292,314 for quarter ended June 1,1929, and $1,559,122
for quarter ended Aug. 31, 1929.
* Before deducting provision for contingencies.
* Deficit.
* Obtained by deducting total of 9 months from annual income account.

Comparative consolidated balance sheet— Working capital
[Warner Bros. Pictures (Inc.) and subsidiary companies—First National Pictures (Inc.), consolidated for first time in 1930]
Aug. 30,
19301

Aug. 31,
1929 *

Aug. 31,
1928

Mar. 27,
1926

Mar. 31,
1925

Aug. 27,
1927

Aug. 28,
1926

$1,070,796
911,024
566,389
173,053
47,860
50,000
2,040,347

$1,047,261
839,914
658,292
112,799
37,309
50,000
855,667

$71B,040
1,194,038
550,604
111, 692
38,863
50,000
926,685

$638,645
1,058,347

5,009,177
1,025,250
252,934

4,889,469
1,162,827

3,601,242
139,031
3 567,077

3,587,922
139,031
3 31,164

1,900,954

42,995
251,976

24,027
497,578
353,216

219,950 /
\
1,251,117
2,347,908

100,000
338,501
80,822
174,343
406,428

557,665
292,822
278,513 |
381,916

5,133,337
1,162,653
4,077,216
590,657
612,809
219,009

4,746,571
1,492,632
2,552,027
1,162,800
121,901

822,755
108,319
772,215
161,817

315,783
183,563
628,204
52,137

11,310,616
11,311,424
1,398,158
1,327,997

9,247,517
10,156,973
2,902,293
1,718,458

ASSETS

Theater leaseholds, buildings, and equipment..........................................................................

Deposits to secure contracts.............................................................................................................

171,.629
157,512
* 1,964,517
765,834

154,004

159,465

28,514

27,214

26,700

280,810

293,153

10,399

626,159

669,813

42,727

492,619
22,206
373,635
66,053
132,420
49,527

830,577
3,330
646,855
85*408

75,186

332,229
15,925
308,177
174,753
68,438
64,022

3,685*767
604.017
1,198,304
381,905

2,574,500
912,866
688,850
285,977

2,789,464
994,657
531,779
359,746

413,117
559,409
257,002
96,913

Accounts receivable, payable in annual installments (secured by shares representing
Development expenses of Vitaphone unamortized..................................................................... }
Development expenses of foreign subsidiaries..............................................................................
Bond and note discount unamortized...........................................................................................
Prepaid insurance, rents, etc........................................................................................................ .

91,757
988,998
2 824,645

CURRENT ASSETS

30,683
19,625

INVENTORIES

Film and Vitaphone product:
Released at cost (less amortization).................................... - ..................................................
Production in progress (cost)....................................................................................................
Positive prints, raw film accessories, and supplies....................................- ................. —

2,693,458
2,695,298
260,392
493,986

PRACTICES

4 2,501,251
668,604

110,713,310
8,181,672
5,824,590
643,795

26,828
23,130

EXCHANGE

Investments in and advances to affiliated companies........... ...................................................

32,755,292
163,767,356
8,417,997
4,547,434
716,436
2,425,487
635,144
69,045

[$1,070,796
1,075,184
192,708
$89,548,007
199,280
91,841
50,000
21,165,303
2,329,368

STOCK

Studio land, as appraised plus additional.....................................................................................
Studio buildings and equipment (less depreciation)..................................................................
Theater real estate, buildings, and improvements..................................................................... $131,012,064
Other real estate, buildings, and improvements.........................................................................
Home office equipment and improvements.................................................................................

Merchandise finished and in process of manufacture, etc., of radio and miscellaneous
divisions...................................................................................................................................
Bights and scenarios (cost)................................................................................. ....................

4.163.207
1.191.207

846,019

92,135

20,325

85,825

112,875

102,375

Total current assets.

42,498,290

34,947,191

8,103,375

7,475,191

5,511,562

5,924,981

3,045,294

Total assets................

230,185,444

167,189,025

15,785,801

15,913,224

10,754,395

10,683,278

5,185,534

1,991,400

1,997,800

1,999,800

2 000,000

87,848,550
11,027,379
1,827,385
42,838,000
>56,965,911

61,176,112
12,435,879
4,459,352
19,205,000
*49,239,127

153,752
*985,743
140,845
4,000,000
732,398
201,000

‘ 1,343,572
13,365

1,490,500
1,031,984
144,052

155,752
*1,234,413
110,234
5,800,000
417,000
804,500
619,318

153,752
*1,264,840
138,086
4,000,000
785,750
153,776

461,541
711,175

711,175

678,244

2,248,221
4,686,763
1,452,597

1,369,864
3,159,448
1,248,314

1,651,000
617,612
839,573

1,183,000
484,821
999,428

75,000
64,831
271,189

59,520
257,500

51,000
307,617

46,000
591,778

737,160

246,000

74,048
165,000
223,095

105,963

52,344

98,589

'289,652

278,889

269,984
50,000

CURBENT LIABILITIES

Total current liabilities.
Total liabilities.
Net working capital7.

864,098
611,837
769,574

78,000
6,585,000
394,735
6,964,609
1,579,495

216,196
77,454
958,421
153,000
323,103

304,055
93,096
675,163
2,441,200
1,096,661

27,011,683

20,212,014

9,166,742

6,531,858

4,076,896

3,762,982

1,150,353

230,185,444
15,486,607

167,189,025
14,735,177

15,785,801
*1,063,367

15,913,224
943,333

10,754,395
1,434,666

10,683,278
2,161,999

5,185,534
1,894,941

38,000

000,000

182,000
'3ii,'333

1 Giving effect as at that date to subsequent sale of 753,484 shares of common stock and the application of proceeds to reduction of notes payable to banks and as additional
working capital.
.
* After giving effect to (a) the sale of $19,205,000 face value optional 6 per cent convertible debentures and application of proceeds to the reduction of liabilities and as additional
working capital, (6) the acquisition of additional shares of common stock of First National Pictures (Inc.), and certain other properties, and (c) the consolidation of the accounts
of First National Pictures (Inc.) at Aug. 31, 1929, after giving effect to the redemption of the second preferred class A and class B stocks of First National Pictures (Inc.) on Oct.
1,1929.
* Covers investment in Vitaphone Corporation only.
* Includes funded debt.
* Includes sinking fund deposits.
7 Based upon statement of current assets and current liabilities as above.
* Deficit.
* Excess of current liabilities over current assets.

PRACTICES

Notes payable and securities on shares building and loan associations (contra).
Notes payable (banks).... ................................................................................................
Notes payable (others)....................................................................................................
Accounts payable and sundry accruals.......................................................................
Mortgages and funded debt due within 1 year......................................................... .
Loans from officers...........................................................................................................
Purchasing money obligations due within 1 year..................................................... .
Due to affiliated companies.............................................................................................
Royalties payable to outside producers...................................................................... .
Reserve tor Federal taxes............................................................................................... .
Advances payable on film service, e tc .........................................................................
Reserve for guarantees to producers..............................................................................
Distribution deposits on contracts.............................................................................. .

EXCHANGE

Purchasing money obligations.............................................
Construction contracts, payment.......................................
Remittances from foreign companies held in abeyance.
Reserve for premium on debentures and contingencies.
Capital surplus......................................... .............................

192,
810,
7,
2,069,
224,
643,

STOCK

Class A stock................
Preferred stock..............
Common stock..............
Profit and loss surplus Minority interest..........
Funded debt..................

Adjusted equities for stock— Adjusted to reflect the conversion of class A stock into common stock on a share for share basis in December, 1928
and two for one common stock split in July, 1929

[Based on comparative consolidated balance sheet]

Number of adjusted no par common snares.................................................................................
Indicates total book value applicable to common stock *.........................................................
Indicates total book value per adjusted common share.............................................................

Aug. 31,
1929 »

Aug. 31,
1928

As of Aug.
27,1927

Aug. 28,
1926

Mar. 27,
1926

3,709,025
$83,847,344
$22.25
$9,501,752
$2.52

2,627,408
$48,116,155
$18.31
$9,652,739
$3.67

1,100,000
$2,056,239
$1.87
$1,618,916
$1.47

1,100,000
None.
None.
$2,291,827
$2.08

1,100,000
$834,697
$0.76
$765,190
$0.70

1,100,000
$1,037,209
$0.94
$808,814
$0.73

Mar. 31,
1925
1,100,000
$4,021,816
$3.66

PRACTICES

EXCHANGE

N o t e . — Above excludes good will and unamortized bond discount, and unamortized development expense, and after allowing for preferred stock in 1930 and 1929, at $55 per share,
but including in 1930, reserve for premium on debentures and contingencies,
i See footnote 1 following Comparative consolidated balance sheet.
JSee footnote 2 following Comparative consolidated balance sheet.
* Including unamortized bond discount and unamortized development expense.

STOCK

Good will, etc., per adjusted common share.................................................................................

Aug. 30,
19901

187

STOCK EXCHANGE PRACTICES
Earning power
[Based on consolidated income account]
7<Ka years,
Apr. 1,
1923, to
Aug. 30,
1930
Aggregate net income (after deducting $453,671 preferred dividend requirements
for 2 years on preferred stock outstanding Aug. 30,1830)......................................... $25,555,866
Earned per share:
On 3,015,541 common shares (no par) outstanding Aug. 30, 1930........................
8.47
On 1,510,831 common shares, average number outstanding on adjusted bads
(for details see table following Comparative consolidated income account).
16.92

Annual
average

$3,445,735
1.14
2.28

C o m p a r a tiv e b a la n c e s h e e t— W a r n e r B r o s . P ic t u r e s ( I n c . ) o n ly , a s r e p o r t e d to
th e N e w Y o r k S to c k E x c h a n g e , la te s t a v a ila b le
Aug. 31,
1928

Aug. 31,1929
ASSETS
Studio land (cost)...................................... .........................
Studio buildings and equipment (less depreciation). .
Other real estate, buildings and improvements............
Theater leaseholds and equipment..................................
Home office equipment and investments.......................

$45,460
137,649
76,211
25,830
I
75,205
25,250
25,250
Investments in subsidiaries.............................................. | 77,464,444 / 3,365,913
I 1,390,515
Accounts receivable from subsidiaries............................
73,322
Other investments..............................................................
294,162
Accounts receivable payable in annual installments
(secured by shares represented one-half interest in
affiliated ccmpAnitt?
_ .
100,000
363,960
Deposits to secure contracts...................... ......................
139.086
483,064
299,408
CURRENT ASSETS
Cash........ ............................. ........................................... . .

Accounts receivable............................................................
Advances to officers and employees__________________
Advances to outside producers........ ................................
Due from subsidiaries and affiliated companies______
Inventories:
Released film (cost less amortization) - - .................
Unreleased film (eost).................................................
Productions in progress (cost)...................................
Positive prints, raw film accessories, etc.................
Rights and scenarios (cost)........................................
Total current assets.................................................
Total assets................................................................

Aug. 27,
1927

Aug. 28,
1926

$3,074,094 <

$57,212
22,600
30,645
25,250
5,412,996
207,802
17,501

2,368,067
379,658
584,578

122,150
642,075

125,100
554,065

465,234
92,551
215*226

72,663
123,224
295,352
67,841

123,536
5,402
312,872
61,483
32,539

1,713,143
2,535,832
209,084
256,846
92,135

2,718,497
727,180
1,130,653
254,402
20,325

2,497,610
907,666
688,850
267,918
85,825

5,580,051
11,554,740

5,410,137
11,966,368

4,983,101
9,091,434

1,991,400

1,997,800

1,999,800

155,752
4,000,000

153,752
4,000,000

8,980,713

162,152
319.000
71,000
643.000
885,017

802,000
1678,787

135,000
>632,714

3,000,000
17,400

1,304,237
4,582,390

918,015
3,108,380

1,651,000
602,210

1,598,278
72,176
2,000,000

200.000
1,020,251
66,186
165,000
145,107

203,925
1,175,345
95,020

376,500
611,182
39,375

188,918

155,329

818,251
466,459
115*344
3,987,379
3,142,631
5,102,593
1,446,442
532,700
70,598
15,682,397
97,166,531

$55,272
3,789
37,309

LIABILITIES

Preferred stock_________ _____________ ______________ }
n n m m n n sta n k
_
.
_ . .......
Funded de^t
Mortgages payable............... ................... ..........................
Purchase money obligations_____ __________ _________
Profit and loss surplus.......................................................

81,176,112
19,205,000
166,650

...........

CURRENT LIABILITIES

Notes payable (banks).......................................................
Notes payable (others).......................................................
Purchase money obligations and mortgage install
ment due within 1 year......................... .......................
Accounts payable and accruals................................... —
Royalties payable___________ _______ ________ ______
Reserve for Federal taxes................ ................. ................
Advance payments on film service..................................
Due subsidiary companies................................................

775,508

Total current liabilities...........................................

7,638,056

Total liabilities..........................................................
Net working capital *.........................................................

97,166,531
8,044,341

7,483,171
11,554,740

5,689,603

3,435,596

11,966,368

9,091,436

’ 1,903,120

5 279,466

1,547,505

i Deficit.
5 Based upon statement of current assets and current liabilities as above.
> Excess of current liabilities over current assets.

188

STOCK EXCHANGE PRACTICES
HISTORY, BUSINESS, AND PROPERTY

Warner Bros. Pictures (Inc.) was incorporated with a perpetual charter
April 4, 1923, under the laws of Delaware and acquired the business thereto
fore operated as a partnership since 1915 by the four Warner brothers.
Company is engaged in the production, distribution, and exhibition of motion
pictures, studios being located in Brooklyn, N. Y., and Hollywood, Calif.
In April, 1925, acquired control of Vitagraph Co. of America and its sub
sidiaries, and in June, 1928, dissolved this company and transferred its assets
to Warner Bros. Pictures (Inc.). The company owns the entire capital stock
of the Yitaphone Corporation, formed in April, 1926, and through this cor
poration owns the trade-mark “ Vitaphone.” In September, 1928, the company
acquired control of Stanley Co. of America and now owns more than 96 per
cent of that company’s capital stock. In December, 1928, acquired control of
Skouras Bros. Enterprises (Inc.), and St. Louis Amusement Co. Early in
1929 acquired entire capital stock of M. Witmark & Sons and of 321 West
Forty-fourth Street (Inc.), also acquired 44L9 per cent of preferred and 61.2
per cent of common stock of Continental Lithograph corporation.
In July, 1929, company acquired entire capital stock of Music Publishers
Holding Corporation, which in turn held the entire capital stock of DeSylva,
Brown & Henderson (Inc.), T. B. Harms Co. (Inc.), Remick Music Co., ana
other companies and subsidiaries, and which operates, directly or through sub
sidiaries, an established business of publishing and selling sheet music. The
music published is popular and standard music and music for instrumental
teaching, theatrical productions, and motion-picture productions. Early in the
second half of 1929 the company acquired the outstanding minority interest
in the common stock of Stanley-Crandall Co. of Washington, property of Con
necticut River Valley Corporation, and property formerly controlled by Silver
man Bros. The property acquired from Connecticut River Valley Corporation
consisted of the fee title or leaseholds of certain theaters located in Connecti
cut. The property taken over from Silverman Bros, consisted of 12 theaters
controlled by them, all located in Ohio, Pennsylvania, and Maryland, and all
equipped for the presentation of sound pictures. In September, 1929, purchase
of the Hoffman chain of 19 theaters in Connecticut at a reported price of
$5,000,000 was announced. In August, 1929, a new subsidiary, Warner Bros.
Downtown Theater Corporation (Los Angeles), was incorporated to operate
theaters in Los Angeles and Fresno, Calif. In November, 1929, the company
acquired all of the assets of First National Pictures (Inc.), and subsidiaries.
Principally through issuance of common stock and bonds, company acquired,
during 1930 fiscal year, 257 theaters located throughout the United States, in
cluding the Schine Chain Theater holdings of about 50 theaters in small Ohio
cities, and Harris Circuit and Manos Theater Circuits. As of April 1, 1930,
acquired the phonograph, record, an# radio departments of the BrunswickBalke-Collender Co., and formed the Brunswick Radio Corporation to operate
them.

189

STOCK EXCHANGE PRACTICES

Major subsidiary amA affiliated companies as of August 31, 1929 (latest
available)

Percentage
owned

Land Holding Corporation................................................
Warner Bros. Broadcasting Corporation........................
Warner Bros. Hollywood Theatre Corporation.. . ............
Warner Bros. Theatres (Inc.)............................................
D o....................................................................................
D o....................................................................................
D o....................................................................................
D o....................................................................................
Warner Bros. Realty Corporation...................................
Warner Bros. Pictures (Ltd.)............................................
Vitagraph (Inc.)...................................................................
Vitaphone Corporation.......................................................
Vitaphone Distributing Corporation..............................
Stanley Co. of America and subsidiaries........................
Stanley-Mark-Strand Corporation and subsidiaries.-.
Stanley-Fabian Corporation and subsidiaries...............
Stanley-Davis-Clark Corporation and subsidiaries___
Stanley-Crandall Co. of Washington and subsidiaries___
Music Publisher Holding Corporation and subsidiaries..
Warner Bros. Artists Bureau (Inc.)...............................
Continental Realty Corporation....................................
Continental Theatres Accessories (Inc.).........................
Cie Vitagraph de France...................................................
Warner Bros. Pictures G. M . B. H ................................
Warner Bros. Theatres (Inc.)...........................................
First National Pictures (Inc.)..........................................
Brunswick Radio Corporation.........................................
Skouras Bros. Enterprises..............................................

State or country

Date

California............
.. . . d o ..................
___ do..................
___ do__________
North Carolina.
Connecticut.......
Ohio.....................
New York..........
California______
Great Britain...
New York..........
____do..................
____do..................
Delaware............
New York..........
Delaware............
Pennsylvania...
Delaware............
....... do..................
New York.........
Ohio....................
New York_____
France............... .
Germany............
Pennsylvania...
Maryland______
Delaware............
........do................ .

Oct. 18,1923
Jan. 23,1925
Nov. 8,1926
Aug. —.1929
M ay 30,1925
Aug. 11,1925
Jan. 28,1916
Oct. 16,1923
July 30,1926
July 19,1912
Apr. 8,1915
........do.............
July 1,1929
June 3,1919
July 23,1926
Aug. 13,1926
July 26,1926
Aug. 24,1925
Jan. 9.1929
Jan. 14,1929
Mar. 20,1929
June 21,1929
Sept 9,1916
Mar. 20,1926
Sept. 27,1929
Nov 4,1929
Dec. 26,1929
Feb. 28,1921

100
100
100
100
100
100
9a 4
100
100
100
100
100
100
97
100
100
75
100
100
100
100
100
100
100
100
100
100
>100

» Class B stock.

Stanley Co. of America, an operating and bolding company, was incorporated
in Delaware with a perpetual charter. The company and its subsidiaries own
or lease about 225 theaters located in the Eastern States in such cities as New
York, Philadelphia, Albany, Newark, Baltimore, Pittsburgh, Washington, and
other neighboring cities and towns.
A complete description of this company has been published in Standard Cor
poration Records, alphabetical section.
Skouras Bros. Enterprises (Inc.), a holding company, was incorporated Feb
ruary 28,1921, in Delaware, with a perpetual charter. Through its subsidiaries
it operates a chain of theaters in the St. Louis territory.
A complete description of this company has been published in Standard Cor
poration Reeords, alphabetical section.
First National Pictures (Inc.) was incorporated in November, 1929, under
laws of Maryland to acquire common stock of First National Pictures (Inc.)
of Delaware, then owned by Warner Bros. Pictures (Inc.), and also the entire
assets of the Delaware company. The entire capital stock of the Maryland
company is owned by Warner Bros. (Inc.). First National Pictures (Inc.)
distributes pictures made for it by its producing subsidiary, First National
Productions, and by independent producers. Affiliation with Warner Bros,
places at disposal of First National all Vitaphone facilities, and the films are
known as First National-Vitaphone Pictures. Control of First National Pictures *
(Inc.) of Delaware was originally acquired by Warner Bros, in June, 1928,
partly through acquisition of Stanley Co. of America, and during October, 1929,
the remaining minority interest (placed at 23 per cent) was purchased from
Fox Film Corporation for $10,000,000 in cash.
Vitaphone receives 3 per cent of gross revenue of Electrical Research Products
(Inc.). Electrical Research Products (Inc.), a subsidiary of the Western Elec
tric Co. (Inc.), receives royalties from its licenses and in turn has contracted
to pay to Vitaphone Corporation for the latter’s pioneering efforts in this field
3 per cent of the gross income derived from the exercising of their licenses by
119852—33— a p p ------- 13

190

STOCK EXCHANGE PRACTICES

all other mption-picture producers who take licenses from Electrical Research
Products (Inc.) in the fields and territories covered by the license to the
Vitaphone Corporation.
Brunswick Radio Corporation is engaged in the manufacture and sale of
talking machines trade-marked “ Pantatropes,” commercial phonograph records,
radio receiving sets, and electrically transcribed records for radio broadcasting,
records for use by the Vitaphone Corporation, records for industrial purposes,
and standard commercial phonograph records for home use. Principal office is
in New York, with distributing offices and agencies in major key cities of the
United States, Great Britain, France, Canada, Argentina, Brazil, and Australia.
Mechanical parts are manufactured in Muskegon, Mich., and cabinets are manu
factured in Dubuque, Iowa.
Warner Bros. Realty Corporation, a wholly owned subsidiary, owns a plot of
land at Sunset Boulevard, in Hollywood, Calif., together with the studio and
various buildings thereon. All the facilities necessary for the making of
modern motion pictures, from the writing of scenarios to the construction of
stage sets, filming of the pictures, the recording of voices and music, the develop
ment of the negative films, the printing of the positive films, the manufacture
of the master records, and the stamping of the final records are available and
conveniently grouped together at this studio. About a mile and a half from the
main studios, Warner Bros. Realty Corporation owns another tract of land
which is used for the erection of many of the more cumbersome outside sets,
such as city streets, etc.
DISTRIBUTION

The company’s products are distributed throughout the United States and
Canada by Vitagraph (Inc.), a wholly owned subsidiary, operating a system
of 36 exchanges situated in the principal cities of the United States and Canada,
Warner Bros. Pictures (Ltd.), a wholly owned subsidiary (formerly Vitagraph
Co. (L td .)), through a system of 10 exchanges situated in the principal cities
of Great Britain and Ireland, is the distributing agent in those countries. Dis
tribution in France (including Algiers), Belgium, and Switzerland is accom
plished through Compagine Vitagraph de France, a wholly owned subsidiary,
which operates a system of 10 exchanges in the principal cities in those coun
tries. Warner Bros. Picture G. m. b. H., also a wholly owned subsidiary, is the
vehicle used for distribution throughout Germany. Elsewhere throughout the
world pictures are distributed by other corporations, firms, or individuals under
annual contracts which for many years have been annually renewed and under
which the distributor is required to distribute and agrees to take the company’s
entire product at a set figure for the year’s output.
l it ig a t io n

Government starts antitrust actvdn seeking divestment of First National
Picture stock.— November 27, 1929, Federal Attorney General Mitchell filed suit
in Federal court, New York, against this company and Stanley Co. of America,
subsidiary, asserting that control of First National Pictures (Inc.) by Warner
Bros, violated Clayton Act. It was alleged that through Stanley Co. controlling
25,041 shares of First National and purchase of 71,893 shares of First National
in open market Warner Bros, now completely dominated First National and
had transferred all First National’s business and assets to First National of
Maryland, which Warner Bros, created. In this way, it was charged, First Na
tional had been eliminated as competitor of purchasing company. Relief sought
would have stock purchases set aside, defendants ordered to strip themselves
of their First National holdings, and an injunction issued restraining them from
exercising their voting rights.
Sherman Act suit dismissed.—August 21, 1930, indictments charging this
company and 11 other motion-picture concerns with violation of Sherman anti
trust law were dismissed at request of Government counsel, who placed before
court a “ consent decree” restraining defendants from entering into any con
spiracy for restraint of trade in films.
Receivership Mil dismissed.— August 26, 1930, announced that receivership
bill filed August 22,1930, by Ira L. Nelson against company and Renraw (Inc.),
real estate subsidiary, had been dismissed by the court upon contention of com
pany that bill of complaint had not been properly verified and sworn to by
plaintiff.

STOCK EXCHANGE PRACTICES

191

In answer to receivership application, on August 25,1930, company denied all
allegations of mismanagement cited in bill of complaint and also charge that
excessive prices were paid Renraw (Inc.) for real estate declaring that it had
had but two transactions with the latter, one of which was without profit to
Renraw (Inc.), and other was at less than cost of subsequent purchases through
another agency.
Denying that bank credits were overextended, company admitted that bank
loans totaled $5,530,000, and that such loans had increased since March 1, 1930,
hut stated that the sum was still less than half company’s line of bank credit
and that loans had not increased in proportion to assets. In defense of sale of
common stock to shareholders, which Mr. Nelson charged had been illegally
authorized, company said the issue had been underwritten, but, as matter of
right, had also been tendered to holders, and that such action, instead of con
stituting gross mismanagement of finances, was sound method of raising capital
which would improve financial position of company and be more than sufficient
to pay off bank loans.
MISCELLANEOUS INFORMATION

Exhibition of company’s releases by Loewi's Theaters in New York.— July
21,1930, announced that all Warner and Vitaphone pictures would be shown in
Loew theaters in five boroughs of New York City.
Merger of subsidiaries.— October 20, 1930, stockholders of Warner Bros.
Theaters (Inc.), subsidiary, approved merger with Danbury Amusement Co.
On October 19, 1930, reported that Mitchell H. Mark Realty Corporation had
merged with Stanley-Mark-Strand Corporation, subsidiary.
Booking agreements.— October 2, 1930, reported company had entered into
$3,500,000 booking agreement with Universal Pictures Co. (Inc.), for showing
Universal films in Warner theaters. October 18, 1930, reported company had
contracted for 1930-31 Columbia Pictures Corporation product of audible fea
tures for an aggregate of $4,000,000.
OFFICERS AND DIRECTORS

Officers: Harry M. Warner, president; Albert Warner, S. E. Morris, Jack L.
Warner, Herman Starr, and Edwin H. Morris, vice president; Abel Cary Thomas,
secretary; Albert Warner, treasurer; Samuel Carlisle, comptroller and assistant
treasurer; Harold S. Bareford, Paul A. Chase, and E. K. Hessberg, assistant
secretaries; Thomas J. Martin, auditor.
Directors: Harry M. Warner, president; Albert Warner, vice president; 1
Waddill Catchings1 (Goldman, Sachs & C o .); Henry A. Rudkin1 (McClure,
Jones & Co.), Richard F. Hoyt1 (Hayden, Stone & Co.), Walter E. Sachs1
(Goldman, Sachs & Co.), Lewis J. Warner, Abel Cary Thomas, and Moe Mark,
all of New York; Jack L. Warner (vice president), Los Angeles, Calif.; Morris
Wolf, Philadelphia, Pa.
*Also a director in other companies.

Full text of Stock Exchange Practices : Hearings Before the Committee on Banking and Currency, United States Senate, (1932-1934) : Hearings on S. Res. 84 : Appendix to Parts 1, 2 and 3

FRASER