APPENDIX

663

(XVIh) The following provisions of the Stock Exchange Constiution
 (Rules, Chapter XV) cover periodic examination of securities
held in safekeeping by Stock Exchange firms:
Sec. 2. Members of the Exchange and firms registered thereon carrying
margin accounts for customers shall, as of the date of their answer to each
questionnaire, cause to be made a complete audit of their accounts and assets,
including securities held for safekeeping, in accordance with such regulations
 as shail be prescribed by the Committee on Business Conduct, and
shall file with said Committee a statement to the effect that such audit has
been made and whether it is in accord with the answers to the questionnaire.
Such statement shall, in the case of each member of the Exchange not a
member of a registered firm, be signed by such member of the Exchange,
and in the case of each registered firm shall be signed by each member of
such firm unless, for good cause shown, the signature of one or more memhers
 is waived by the Committee on Business Conduct. Such statement
shall in all cases be attested by the auditors, and the original report of the
audit, signed by the auditors, shall be retained as part of the books and
records of the member or firm.
Sec. 3. Each member of the Exchange and firm registered thereon, not
carrying margin accounts for customers, shall, at least once a year and
whenever called upon so to do by the Committee on Business Conduct,
ceport to said Committee whether such member or firm holds securities for
safekeeping. Each of such members or firms holding securities for safekeeping
 shall, at least once in each year, file with the Committee on Busiress
 Conduct a statement that all securities held for safekeeping have been
-hecked and found to be intact, which statement shall also show in what
manner the verification of the securities has been made and the date thereof.
(XVIi) The Annual Report of the President of the New York
Stock Exchange for 1920-30 (p. 110) contains the following percentage
 statistics of insolvencies since 1900 of New York Stock Exchange
 members, national banks, American banking institutions of
all kinds. and American commercial firms:

Year

1900. .
{QOI. ..
1902. ..
(903...
(904. . . .
1905. . ..
1906.
907. ...
(9o8. ...
1909...
1910...
1911...
[912....
1913.
191s
ny’

rv.

>.
"embers
7

0 18
J 54
0 45
0.27
0.09
0.90
0.00

J

American
Banks

)
+ 2
oA
0 LI
0 46
0.79
0.40

Nationa!
Banks
%
“3
I
8
ey

0
o
o
nt

= <
Sal
0.08
0.06
0.08
0.16
0.20
0.26

Commercial
Houses

b:)
2.80
0.80
0.81
0.98
0.99
1.10
[.22