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Mr. WOLVERTON. In other words, your thought is that this section is no broader in its effect than was the provisions in the securities act which merely require the giving of information to the Tariff Commission to enable individuals to determine whether they wish to make the investment.

Mr. CORCORAN. The whole purpose of the section is to give the stockholder a chance to know what is going on in his corporation. Mr. WOLVERTON. And, you do not consider that there is any more discretion lodged in the Federal Trade Commission under the terms of this bill than was lodged in the Trade Commission under the terms of the securities bill?

Mr. CORCORAN. Well, I cannot remember verbatim the terms of the securities act here and now. I know certainly it never was intended that there would be any control of industry under this bill such as Mr. Cooper and the stock exchange are talking about. I know that that was not intended.

Mr. WOLVERTON. As I understood it, the thought underlying the securities bill when it was finally adopted, was to provide information to a prospective buyer and not to pass upon whether or not the security was good or bad.

Mr. CORCORAN. Exactly; yes.

Mr. WOLVERTON. And in this particular instance it is the purpose to get the information, but not with the idea of passing upon whether or not it is a good stock.

Mr. CORCORAN. To get the information and require compliance with the act generally, but not in any sense to control the flow of capital.

Mr. COOPER. That is your viewpoint.

Mr. CORCORAN. Yes.

Mr. COOPER. Of course, business and industry in the country have their good lawyers, and they examine these bills and they say that it will control private capital.

Mr. CORCORAN. Well, sir, what they are doing is looking only at the particular language of a particular section. We have had that trick before, in connection with the securities bill.

Mr. COOPER. What do you mean by "trick"?

Mr. CORCORAN. I mean, it is a lawyer's device, instead of looking at the document as a whole, to just look at two or three words, and then conceive all of the possible extreme interpretations of those words. Here you have a bill that is for the regulation of stock exchanges, and securities listed on the stock exchanges in the interest. of the investing public. The whole bill, and all of the illustrative purposes included in section 11 (a), (b), and (c), clearly show what the section is aiming at. The language is broad, because you cannot specifically cover every possible contingency. Therefore, the language reads that the Commission can prescribe by rules and regulations what the listing application shall contain.

Now, what information shall be given and what undertakings, to carry out the purpose of the act, shall be entered into by the issuer? You must read this so-called "broad language" in (b), in connection with the specific provisions in the rest of the section.

Mr. COOPER. Now, may I say this: We have thousands of fine. people in our country that are interested in industry and in business. Mr. CORCORAN. Yes.

Mr. COOPER. And, they have suffered tremendous losses during this depression.

Mr. CORCORAN. Yes.

Mr. COOPER. Especially, I have reference to the steel industry. Mr. CORCORAN. Yes.

Mr. COOPER. They are very much concerned about this measure. Mr. CORCORAN. Yes.

Mr. COOPER. They seem to think it is going to work a hardship on them, make it harder for them in the future to come. They have a perfect right to analyze this bill.

Mr. COOPER. And express their viewpoint on it.

Mr. CORCORAN. That is true. But I say that they are raising very strong objections on what are unreasonable interpretations, in the light of the rest of the bill, which does not justify anywhere the extreme positions they are taking. And I am saying to you that nobody interested in this bill objects to rephrasing particular language so long as you leave the Commission latitude to make such rules and regulations to see that the act is carried out and in relation to such undertakings, as will insure publicity such as you have under (c). That nobody objects to.

Mr. COOPER. In otherwords, we have thousands of industrial and business institutions that have no idea of trying to beat the public. Mr. CORCORAN. Yes.

Mr. COOPER. By selling stock.

Mr. CORCORAN. That is absolutely true.

Mr. COOPER. Thousands of them.

Mr. CORCORAN. And, I do not think that anybody wants to have the Government pass on the desirability of capital issues. I should not say there is nobody; there are some people that think that it ought to be done.

Mr. COOPER. And, the

The CHAIRMAN. The answer is, Mr. Corcoran, that this committee is not going to do that.

Mr. CORCORAN. I am certain that it is not.

The CHAIRMAN. I think I have a right to say that this committee is not going to do that.

Mr. CORCORAN. And, after all, the Federal Trade Commission is, supposing it is to be the body that administers this act, under the control of Congress and if any trade commission strained the language of this statute to overstep its bounds and do what you are afraid of, you as a Congressman would change the act in 5 minutes.

Mr. COOPER. I do not know about that.

Mr. WADSWORTH. That is easier said than done. It might take years to change it.

Mr. CORCORAN. Another thing, Mr. Cooper. I do not know of any commission between here and the end of Christendom that could administer any such power as you are afraid that the Commission might undertake.

Mr. COOPER. Just on that point: We have had some experience in trying to change bills in this session of Congress. The very first bill that came before the House. They absolutely prohibited the membership of the House from expressing themselves and advocating certain changes in that legislation. You say that it is easy to do that. It is not.

Mr. CORCORAN. Mr. Cooper, I think the answer is Mr. Rayburn's answer, that there is certainly nobody who is interested in this bill that ever intended to give any commission administering the bill the power to ration out the flow of capital into industry.

Mr. COOPER. I do not think, Mr. Corcoran, that it was the intent to put such a drastic provision in the bill.

Mr. CORCORAN. Well, I cannot agree to that. I do not think that it is in the bill, Mr. Cooper.

Mr. WOLVERTON. And, your thought is that if this language does give that power, you would change the language?

Mr. CORCORAN. I would change the language.

The CHAIRMAN. May I repeat a statement that I made at the beginning of the hearings.

Now, this bill was introduced by me as the basis for consideration, and that is all. It is not my bill. It is not the committee's bill. Mr. MAPES. Mr. Chairman

The CHAIRMAN. Mr. Mapes.

Mr. MAPES. Do you not think it is possible for this committee to work out more definitely what the stock exchanges ought and ought not to do, and not subject them so much to the control of the commission, the personnel of which may change at any time? No one can tell what influences the personnel will be subjected to. Nobody knows whether this administration will favor any particular interest or whether the next one will favor some other interest. Is it not possible for Congress to figure out what evil practices should be prohibited and thus outlaw them in this legislation and not leave so much to the arbitrary discretion of the Commission?

Mr. CORCORAN. Well, Mr. Mapes, you have, as I said before, a great many and a great variety of exchanges. The standards on one are not the standards on another. You normally think of the New York Stock Exchange as the norm. It is not. It is the very best that you have. You have an enormous multiplicity and variety of situations. If you should try to sit down here and prescribe what the listing requirements should be on each kind of issue on each kind of exchange and how those exchanges should operate in detail, considering the differences between them, you could not do it. I have to make that statement.

What has been done in this bill is very carefully to enumerate a great many things as to which you say the Commission should have

power.

Mr. MAPES. I am quite in accord with the general purposes of those sections which specify definitely what practices shall be prohibited, but I do not like to delegate so much power to any administrative board unless it is absolutely necessary.

Mr. CORCORAN. It is an old problem you have, sir. We have been talking much here about rigidity and discretion. This administrative section is one place where you must learn discretion, because you face such a multiplicity of situations that you just cannot legislate in detail for every one.

Mr. MAPES. Of course, that is the question, whether that is necessary or not.

Mr. CORCORAN. You just read these two pages, and you will realize what a job you would get into in just enumerating the kinds of things that may come up.

What this really does, sir, is to provide that the Commission shall have something to say about all matters covered by stock exchange rules, because the stock exchanges have not themselves been able to take care of the problem of handling their practices through rules, and the multiplicity of particular situations is so great, sir, that you would have a bill 500 pages long, before you finished, if you tried to write in all the details. And when you finished, the people regulated would not want regulation in detail, because no two situations are ever alike. By the language used here you have specifically enumerated certain objects of legislation and by that enumeration given an indication of the kind of things you want the Commission to control. When you have done that, you have done about all Congress can do. Mr. MAPES. The law ought to be made to apply to all alike, and I hate the idea that some man can go to an administrative official and get something done that another fellow on the street cannot.

Mr. CORCORAN. You have to have the power to make rules and regulations in every administrative body. The answer is to pick good men on your commissions.

Mr. MAPES. Well, that sometimes is no answer at all.

Mr. CORCORAN. It is the ultimate answer to any governmental problem.

The CHAIRMAN. If 1 may take a half a minute, I quite agree with Mr. Mapes, and that is what we are trying to do in the committee and have been trying to do for a long time. We have had to vote powers to the Interstate Commerce Commission that nobody dreamed of in 1887, because we cannot go into the particularities of regulations. And we are going to try to do that in connection with this bill before we get through with it.

We are very much obliged to you, Mr. Corcoran. You have made a very elucidating, interesting, statement.

I will ask the committee to remain a few minutes.

(Thereupon, the committee proceeded to the consideration of other business, after which it adjourned.)

Mr. CORCORAN. Mr. Cooper, I think the answer is Mr. Rayburn's answer, that there is certainly nobody who is interested in this bill that ever intended to give any commission administering the bill the power to ration out the flow of capital into industry.

Mr. COOPER. I do not think, Mr. Corcoran, that it was the intent to put such a drastic provision in the bill.

Mr. CORCORAN. Well, I cannot agree to that. I do not think that it is in the bill, Mr. Cooper.

Mr. WOLVERTON. And, your thought is that if this language does give that power, you would change the language?

Mr. CORCORAN. I would change the language.

The CHAIRMAN. May I repeat a statement that I made at the beginning of the hearings.

Now, this bill was introduced by me as the basis for consideration, and that is all. It is not my bill. It is not the committee's bill. Mr. MAPES. Mr. Chairman

The CHAIRMAN. Mr. Mapes.

Mr. MAPES. Do you not think it is possible for this committee to work out more definitely what the stock exchanges ought and ought not to do, and not subject them so much to the control of the commission, the personnel of which may change at any time? No one can tell what influences the personnel will be subjected to. Nobody knows whether this administration will favor any particular interest or whether the next one will favor some other interest. Is it not possible for Congress to figure out what evil practices should be prohibited and thus outlaw them in this legislation and not leave so much to the arbitrary discretion of the Commission?

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Mr. CORCORAN. Well, Mr. Mapes, you have, as I said before, great many and a great variety of exchanges. The standards on one are not the standards on another. You normally think of the New York Stock Exchange as the norm. It is not. It is the very best that you have. You have an enormous multiplicity and variety of situations. If you should try to sit down here and prescribe what the listing requirements should be on each kind of issue on each kind of exchange and how those exchanges should operate in detail, considering the differences between them, you could not do it. I have to make that statement.

What has been done in this bill is very carefully to enumerate a great many things as to which you say the Commission should have power.

Mr. MAPES. I am quite in accord with the general purposes of those sections which specify definitely what practices shall be prohibited, but I do not like to delegate so much power to any administrative board unless it is absolutely necessary.

Mr. CORCORAN. It is an old problem you have, sir. We have been talking much here about rigidity and discretion. This administrative section is one place where you must learn discretion, because you face such a multiplicity of situations that you just cannot legislate in detail for every one.

Mr. MAPES. Of course, that is the question, whether that is necessary or not.

Mr. CORCORAN. You just read these two pages, and you will realize what a job you would get into in just enumerating the kinds of things that may come up.

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