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Show Defends Short Selling The practice of making short sales on the New York Stock Exchange Ex-change has received considerable criticism 1 recently. Some critics gc so far as to hold this practice responsible for the low levels ol security prices. Proposals are being be-ing heard that legislation be enacted en-acted to prohibit further short selling, that is, not to allow a broker or individual to sell stock which he does not have. The officials of the Stock Exchange Ex-change defend ihe policy of permitting per-mitting short sales, because they say that "short selling is an essential essen-tial part of a market for securities." securi-ties." President Richard Whitney of the Exchange denies that short selling caused the decline in prices and declares that the falling market mar-ket has been caused by the present pres-ent "business depression more severe se-vere than any within the memory of man." Adverse woriawioe eruditions eru-ditions accumulated and "taken collectively, the force was irresti-ble." irresti-ble." Mr. Whitney feels that the existence ex-istence of a number of shares sold short constitutes "a cushion" to break the effect of too rapid a decline, and in this way helps break the forte of any calamity. To show that short selling was not responsible for low prices he gives the figures of the short sales sold in several stocks, which lead in the number of shares shar-es sold short, and points out that the price fluctuations were not uniformly down. Of the fifteen stocks that from May 25th showed the greatest drop in dollars per shnre, Mr. Whitney says, only three had any considerable short interest at any time, five had practically no short interest at any time, and eleven at different times had no short interest. |