The first step towards the solution of these problems would be the establishment of return commissions to Outside financial houses. Under the present constitution of the Stock Exchange no member is allowed to refund any part of his commission tot a non-member. The over-the-coun-\ter dealers, the trustee-departments of the bank and the many other institutional and professional administrators of funds have therefore no incentive to give business to the Stock Exchange; and this has been one of the main reasons why even conservative Stock Exchange houses have not been able to obtain a fair share of the investment bond market.
But introduction of the return commission would entail a complete disruption of the present system, as most of the provincial branches of the commission-houses would become superfluous and would have to close down. From the point of view of the individual firm it is highly doubtful whether this sacrifice would be worth while.
'Nobody' can tell whether the New York central office would succeed in retaining the share of the local business which had been held by the branch office and which would then be taken over by independent local banks and security dealers. Although the proposal to introduce return commissions on the British pattern will continue to dominate the discussion, it is, therefore, by no means certain whether and when it will be adopted.
Another measure that might ease the situation would be the simplification and reduction of the oversized machinery at New York headquarters. The first step in this direction was the tentative introduction of fortnightly instead of daily delivery of securities between Stock Exchange members, which is, of course, not to be confused with the fortnightly "settlements" of the London Stock Exchange.
Text read from the printed page and cleaned; old type leaves the occasional error.