In the Senate

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation. . . .

U. S. Senators on their way to the Capitol to debate the Stock Exchange Control Bill one day last week were startled to read in Washington papers the Declaration of Independence as an advertisement. They were even more startled to read: "This advertisement is paid for by Frazier Jelke & Co., members of the New York Stock Exchange." But search as they might the Senators could find nowhere the customary tagline of all financial advertising: "The above information is derived from sources which we believe reliable but is not guaranteed." As all member firms must, Frazier Jelke had to submit Thomas Jefferson's text to the Stock Exchange's business conduct committee for approval before it could be run as an advertisement. Partner Victor G. Paradise declared that he expected Washington charges of "propaganda."

But even the Declaration of Independence had no influence on Senators bent on passing the Stock Exchange Bill as the Administration wanted it. One by one all attempts at pulling its teeth were overridden with dispatch. When Wall Street heard that Ohio's Senator Bulkley had been able to pick up 30 votes, including Senator Carter Glass's, for an amendment banning all margin trading, the last slim hope for a moderate measure disappeared. Stock Exchange seats plummeted to $100,000, down $40,000 from last month, $90,000 from last February.

One morning the Senate convened at 10 o'clock, two hours ahead of its normal schedule. At precisely the same moment the New York Stock Exchange was opening for the last session in the third week of a steady decline. Three hours later the bill was passed, 62-to-13. Only Stock Exchange official present in the gallery was its counsel, Roland Redmond.

This week the Senate bill goes to conference with the House to iron out differences between the two versions:

1) The House calls for administration by the Federal Trade Commission; the Senate would establish a separate commission of five to be named by the President.

2) The House fixes margin requirements by formula; the Senate leaves the question to its commission.

3) The House bill does not carry the Senate's riders to modify the Securities Act.

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