CO129-416 - Public Offices - 1914 — Page 326

brokers.

322

If the proposed Regulation is effective it would

prevent the sale of any shares by a person who had not

the shares in question under his control, and would

thus entirely eliminate bear transactions in share

dealings. The extreme cases of the creation of corners

in shares might thus be prevented, but the effect of

the elimination of the bear would be to facilitate the

unloading of shares of little intrinsic value on to

the public at high prices. If bear selling is made

impossible it will be easy for persons who hold a

large proportion of shares of any particular company

(which shares may be vendors shares allotted to them

as fully paid up) to raise the price by a moderate

expenditure in purchasing shares, and then to sell

their shares to the public at high prices.

I am accordingly to suggest, for the consideration

of Sir E. Grey, that the harm which is likely to be

caused by the proposed Regulation through the restric-

tion of legitimate transactions, and by the additional

facilities for improperly inflating the price of

securities, would outweigh any benefit which may be

derived