THE SHARE-PUSHING EVIL
[To the Editor of THE SPECTATOR.] Snt,—The solution of this problem will require much hard thinking; but' it is doubtful if the suggestions put forward in the article in last week's Spectator will not create more problems than- they would solve.
You state that "•If outside brokers are to continue at all they. should require to obtain a licence, from the London or some Provincial Stock Exchange.".
If the existence of the outside broker depends on the securing of a licence in this way, the -London Stock Exchange might as well secure a charter. straight away. The whole question goes-deeper than .this. .
. You say : "That. there are.many perfectly honest outside. brokers is not for a moment to be denied."...
This is the question 'which-needs answering : Do these perfectly honest outside „brokers .fulfil a. necessary function, which is not at. present,. and cannot wader present conditions, be-fulfilled elsewhere ? • A problem which the London Stock Exchange bas only been able to solve because of the co-operation of some of its members with outside brokers is the difficulty of creating a real market in the shares of the vast number of lesser known public companies. It is because the outside broker is free from the Stock Exchange restrictions regarding advertising, &c., that he is able to find markets which are denied to the inside broker.
In fairness to a vast public who hold shares in the lesser known- induUrial 'companies, and in fairness to those "many perfectly honest outside brokers " who, at enormous expense, have built up a system which insures reasonable freedom of exchange in such shares, the solution of the problem of the share-pushing evil must, it seems to me, be sought along other
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