Show TOE TIlE DAILY NEW YORK Fin Financial a n C I a I W Whirligig h i r I i gig Written for br The Telegram by JAMES McMULLIN NEW V YORK Inside Wallstreet Wall all Wallstreet street is betting that Ferdinand Pecora successor on the securities securities ties and exchange c commission commission- like young Lochinvar Lochinvar comes comes out of the west The Tile dope is that congress congress con con- gress is getting geography con con- Four of oC the five ori original inal members members Kennedy Kennedy Landis Healey Healey Hea- Hea ley Icy and Pecora are arc easterners and George Matthews hails haSIs from only as far away as Wisconsin It appears that the tile Pacific coast is due to get the call this time There will be quite quito a squawk if it doesn't Wise Vise sources observe that the administration far tar from being annoyed is In probably rather grateful grate grate- ful ul for the sectional pressure It affords an excellent excuse for not naming Baldwin Bane Mr Bane as the commissions commission's executive executive executive tive administrator was supposed to Lo have leave the inside tri tro track le k but buthe ha has Imas been derailed Why grapevine grapevine grape grape- vine says its it's because he is sponsored sponsored spon spon- b by Senators Glass Gass and Byrd Byrdo o of Virginia Considering their records on the new deal dral that might be interpreted as reason enough t It ItOn On the far western hypothesis Frank C. C able pres ident of oC the San Francisco stock exchange is rated a leading can can- This is also on the theory theory theory the the- ory that the new appointee should have Intimate knowledge of oC what makes exchange wheels go round The one thing thin against Shaugh Shaugh- nessy is the lively livey publicity campaign campaign campaign cam cam- waged on his behalf behal That may boomerang on Capitol hill hiJI has been boen coolly detached from the Wall Vall street crowd in the past He FIe was active in getting S SEC E C established established- worked hard for the dence of smaller exchanges But New York would a lot rather see him in there than someone mea like Ben Cohen The securities and exchange ge commissions commission's r e c c commendations o 0 for revising the tho management setup setup set set- Li up of cf exchanges was a shock to the Wall Vall street old guard The proposed alterations strike at the vcr very cry roots of their power and prestige Asking voluntary acceptance ac acceptance acceptance ac- ac of such heresies is like asking Mussolini to restore de de- de The commission suggests that stock exchange officers and governors governors gov gov- be nominated directly by the membership Instead of by a special committee committee also also that nonmembers nonmembers nonmembers non- non members be eligible to serve on committees as officers It so happens that these ha have been the two biggest planks in the tho platform platform platform plat plat- form of oC the Whitney anti brok brok- ers Could this be coincidence 4 ill e eThe The situation boils down to a n heated grapple between the present present pres pres- ent authorities and the Ule big commission commission com corn mission houses The latter feel they have much more contact with the public and also n a much bigger stake sUlee in revived public in interest interest in- in terest than the local firms and should therefore have a far larger larg brg- er voice in determining exchange policies Some insiders say the commission commission commis commis- sion slon wants voluntary action on its recommended changes because it doubts its authority to enforce them under the law In any case it has put the powers vers that bOo bo ona on ona ona a most distasteful spot If they refuse to act it places them in abad a abad abad bad Ji light ht with the public If they yield it means permanent surrender surrender surrender der to the rebels No definite decision decision decision de de- de- de has been made but the odds favor an attitude of ot passive resistance 0 A steady flow of foreign funds has been quietly pouring into the United States in the past few months accelerated in m recent weeks European political uncertainties uncertainties plus the precarious monetary monetary mone mono tary grip of ot tho the gold bloc have led frightened capital to seek a refuge here Some observers scent danger danser to our own economic stability in this situation They fear that any adverse adverse adverse ad ad- verse development in this country r or or even the revived threat of ot inflation in in- woud huge sums of oC money scurrying back across the ocean and thus plunge us into re- re financial stringency and possible disaster But the bestin best- best in informed ormed sources raise raise no goose- goose pimples pimple about this contingency contingency- claiming we are firmly enough h planted not to be seriously upset even by unanimous withdrawals of nervous foreign cash The big financial boys have a jitter jittery jit jit- jit- jit ter tory tery eye on the conr congressional ional proposal proposal proposal pro pro- to eliminate tax exempt se se- se e- e This would make a whale of ot a di difference to their income tax and and md it appears to have a good chance of oC passage Impartial observers concede that tax exemption on federal issues has handicapped the government in two ways was These securities have served as storm cellars for the people best able to to take business risks and and therefore has served to check chock the natural flow of ot capital into indus indus- tr try Also because Also because the tax exempt feature appeals chiefly to large in investors in n- n it it has tended to concentrate concentrate concentrate concen concen- the market for federal securities securities ties in the hands of wealthy institutions on Wall ValI Street This in turn has made the treasury somewhat somewhat some some- somewhat what dependent on Wall Street The proposed change would compel compel com corn pel the government to pay higher interest on its offerings but its in income income income in- in come would be greater and its position po po- po salon stronger and more inde inde- pend pendent nt It a After Alter all the talk of ot revising the national recovery act th the chances arc that nothing will happen except except ex ex- extension of the present law Jaw for tor another year car Too many basic issues are arc involved to be handled in a hurry Permanent codes remain remain remain re re- re- re main part of the new deal plan but the word is that F. F D. D R. R wants more time to work out a cure for the many defects detects in the present system It looks look as if the blue blueeagle blueeagle eagle will have to limp along on the same old wings for a 1 while e As near as investment trust lawyers law jers can an figure figur their clients will have to pa pay an any special taxes lev led on holding companies but will probably be exempted from other special regulations That's like the speeder who feared both a 1 fine and a jail sentence and then found he on only had to pay 3 mone money He was relieved but not hilarious o o 00 o 0 New York brewing interests profanely wonder what was the idea in halving the beer tariff tariff- as if the field wasn't overcrowded already They suspect a plot to boost customs revenues at their expense Imported beer used to be quite a racket in the old od days On oc occasion occasion occasion oc- oc casion more than 10 times as much imported beer was sold as actually entered the country from abroad One of the brewers' brewers main worries worries worries wor wor- ries is the shaky credits that the they have been obliged to extend to meet competition Their code is supposed to forbid that sort of thing but doesn't A leading |