COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE

HARLEY O. STAGGERS, West Virginia, Chairman

TORBERT H. MACDONALD, Massachusetts

SUBCOMMITTEE ON COMMERCE AND FINANCE

JOHN E. MOSS, California, Chairman

JAMES T. BROYHILL, North Carolina
JOHN WARE, Pennsylvania
JOHN Y. MCCOLLISTER, Nebraska

Study of the Securities Industry

WILLIAM H. PAINTER, Special Counsel

1318, 1413, 1490

1712

Bevis, Herman W., Executive Director, Banking and Securities Industry Committee..

William J., Chairman, Securities and Exchange

Casey, Hon.
Commission..
Celler, Hon. Emanuel, a Representative in Congress from the State of
New York..

Delahunty, Christopher J., President, Pacific Coast Stock Exchange
Clearing Corporation_-_

1639

1352, 1413, 1490

Du Pont, Henry W., Chairman of the Board and President, SCI-TEK,
Incorporated..

1380, 1413, 1490

Haack, Robert W., President, New York Stock Exchange, Inc., ac-
companied by Donald L. Calvin, Vice President...
Howland, Richard B., President, Stock Clearing Corporation, New
York Stock Exchange, Inc.---

1728

1325, 1413, 1490

1368, 1413, 1490

Kaestner, Frank W., Šenior Vice President, Manufacturers Hanover
Trust Company-
Loeffler, Robert M., Senior Vice President-Law, Investors Diversified
Services, Inc.; accompanied by Richard M. Phillips, Esq., of Hill,
Christopher & Phillips, Special Counsel to IDS...
Loomis, Hon. Philip A., Jr., Commissioner, Securities and Exchange
Commission..

Macklin, Gordon S., President, National Association of Securities
Dealers, Inc., accompanied by Lloyd J. Derrickson, Vice President
and General Counsel..

Maller, Robert R., Senior Vice President, United States Trust
Company of New York.

1669

1712

1739

1555, 1613

Montross, Phillips M., President, Midwest Stock Exchange Clearing
Corporation..

1343, 1413, 1490

Morgan, David H., President, National Clearing Corporation,
NASD...

1362, 1413, 1490

Needham, James J., Commissioner, Securities and Exchange
Commission..

1316 1548, 1613

O'Connor, Bernard, Vice President and General Manager, United
States Banknote Corporation.

1561, 1613

Noyes, Clifford H., Regional Vice President, North American Rockwell
Information Systems Company.

Peake, Junius W., General Partner, Shields & Company... 1373, 1413, 1490 Pollack, Irving M., Director, Division of Trading and Markets, Securities and Exchange Commission__.

Reinisch, Hans Randolph, President, National Shareholders Association, New York...

1712

1685

Schapiro, Morris A., President, M. A. Schapiro & Co., Inc.; accompanied by George D. Reycraft, Esq., and Thomas A. Russo, Esq., of Cadwalder, Wickersham & Taft..

Sporkin, Stanley, Associate Director, Division of Trading and Markets,
Securities and Exchange Commission...

1652

1413, 1490, 1538, 1613 Weinberg, Eli, Partner, Lybrand, Ross Bros. & Montgomery Co.-- 1540, 1613

Noyes, Clifford H..

1549

O'Connor, Bernard, to include an article; illustrations; a speech by

Fred R. Esty, Chairman of the Board, United States Banknote
Corporation; and releases..

1561

Peake, Junius W.

1377

Reinisch, Hans Randolph, to include article and attachments with illustrations.

1696

American Stock Exchange:

List of all members and top staff, including their places of residence
and business addresses__

1496

Banking and Securities Industry Committee (BASIC):

List of all members and top staff, including their places of residence
and business addresses-

1494

Notes submitted by Herman W. Bevis on his study of the German, French, and of Morgan Guaranty's Euro-Clear depository -Calvert, Gordon L., Investment Bankers Association of America: Letter dated October 6, 1971, urging prompt enactment of legislation abolishing stock certificate for use in interstate commerce.. Celler, Hon! Emanuel: Letter dated November 12, 1971, to Richard W. McLaren, re concern of antitrust implications of the New York Stock Exchange_

1509

1580

1646

Ernst, Martin L., Vice President, Arthur D. Little, Inc.: Letter dated October 15, 1971, elaborating on industry's automation problems.. 1577 Federal Bar Journal: Article entitled "The Status of Regulatory Independence," by A. Everette MacIntyre.

1811

McLaren, Richard W.: Letter dated November 19, 1971, in reply
to letter of November 12, 1971, from Hon. Emanuel Celler.
McNeill, Charles R.: Letter dated November 16, 1971, clarifying
misunderstanding of testimony of October 18, 19, and 20__
National Association of Securities Dealers, Inc. (NÁSD):

1650

1524

Letter dated July 22, 1971, from Gordon S. Macklin, in reply
to the NYSE letter of July 8, 1971..

1426

List of all members and top staff including their places of residence
and business addresses_

1498

Letter dated November 18, 1971, submitting views in planning a
clearing facility in New York.

1531

National Clearing Corporation: List of all members and top staff,
including their places of residence and business addresses.
New York Stock Exchange:

1499

Letter dated July 8, 1971, setting forth NYSE thoughts on the
forthcoming introduction of a continuous net settlement system
in New York...

1424

Letter dated October 22, 1971, setting forth a listing of the names,
business addresses, home addresses of the governors, president,
etc. of the exchange-

1494

Material relating to the incorporation of the New York Stock
Exchange--

1755

Additional material submitted for the record by-Continued

Nicholson, Clayton M., Vice President of the Stock Transfer Associa-
tion, Inc.: Letter dated November 19, 1971, explaining action taken
by his organization in the problems of the securities industry-
O'Connor, Bernard, article entitled "Optical Speed Reading".
Peat, Marwick, Mitchell & Co.: Letter dated June 21, 1971, re material
submitted pertaining to various proposals for dealing with security
certificate..

Perkins, John H., Chairman of the National Coordinating Group for
Comprehensive Depositories: Letter dated December 23, 1971, to
Chairman Moss advising him of their interest in the subject of
immobilizing_certificate in depositories___

Securities and Exchange Commission:

Letter dated December 15, 1971, setting forth SEC opinion re-
garding statutory authority of SEC to compel NASD to adopt
uniform rules for clearance and settlement procedures by all
NASD members for both O-T-C and listed stocks, with

attachment____

Material relating to the incorporation of the New York Stock
Exchange

Reply to letter of October 4, 1971, to Hon. John E. Moss, with
attachments_

Report of the SEC regarding comments on pending legislation,
submitted to the Office of Management and Budget for clearance.
Securities Exchange Act of 1934, Release No. 9426...
SEC data showing number of firms which went out of business
from late 1968 to 1970, where data processing was a significant
factor in failure, with attachments__

Securities Exchange Act release 8543 and other sundry releases..
Steadman, John M., The Law School, University of Pennsylvania:
Letter dated April 5, 1971, to Commissioner Smith, SEC, regarding
views to eliminate all stock certificates___
Subcommittee on Commerce and Finance:

Article entitled "Securities Struggle-Battle for Influence Over
Stock Trading Looms on Wall Street".
Correspondence between staff of Subcommittee on Commerce and
Finance and the SEC, re policy of placing rule 17a-8 proposals
in a public file..

Letter dated October 4, 1971, from Hon. John E. Moss to Hon.
William J. Casey, to inform him as to the statutory basis for
clearing its budgetary requests with the Office of Management
and Budget..

Letter dated October 20, 1971, from Hon. John E. Moss, to George
P. Shultz, Director, Office of Management and Budget, re-
questing to be informed why SEC has to submit to the OMB
proposed legislation, legislative comments, etc., prior to or
simultaneously with submitting such material to Congress___
Letter dated October 20, 1971, from Hon. John E. Moss to the
Chief Justice of the United States, asking his views re what
effect there would be if SEC were empowered to conduct its
Supreme Court litigation independently of the Solicitor Gen-
eral's Office..

Shultz, George P.: Letter dated November 10, 1971, in reply to
letter from Hon. John E. Moss, dated October 20, 1971.
Supreme Court of the United States: Letter dated November 9,
1971, replying to letter of October 20, 1971, from Hon. John E.
Moss..

Van Dam, Henry, Corporate Transfer Agents Association: Letter
dated October 19, 1971, submitting position papers to Subcommittee
on Commerce and Finance_._.

Page 1534

1632

1440

1534

1415

1757

1800

1395

1709

1458

1450

1585

1419

1666

1800

1808

1809

1808

1809

1533

Weinberg, Eli, article from Bank Administration, May 1971, en-
titled "A System of Certificateless Stock Transfers".

1581

PARTS 4 AND 5

APPENDIXES

M. Answers to Questions, by Herman W. Bevis, Executor Director,
BASIC...

N. Comprehensive Securities Depository System-Study of Canceled
Stock Certificates, with statistical tables, exhibits, and charts - - - - -
O. Making the Certificate Machine-Readable (Discussion Paper, Sep-
tember 9, 1970) ....

P. Research Report on Making the Certificate Machine-Readable_
Q. The Machine-Readable Certificate Project...

Ř. Four Proposed Uniform Forms-Transfer Instruction Delivery Ticket
Comparison Reclamation Form...

Page

1833

1838

1869

1888

1893

1895

T. Memorandum of Understanding on a Comprehensive Securities Depository System--

S. The Billion-Share Automated Securities Depository (Central Certificate
Service)..

1908

U. Chronology of the New York Stock Exchange, Stock Clearing Corporation___

1922

1929

V. Operating Rules of the National Clearing Corporation

W. Report and Recommendations of the Security Imprinting and Processing Task Force of the Committee on Uniform Security Identification Procedures___

1935

1960

X. OCR Equipment for Reading Stock Certificates (Report to BASIC-
July 1970), with charts, tables, and exhibits..

1971

Y. Letter from Chairman Casey of SEC to Mr. Moss regarding fails, with charts, tables, and exhibits__

2012

Z. Suggest approach to the National Clearing Problem, with charts and exhibits_

2039

AA. Securities Industry Overview Study

2055

BB. Paper Crisis in the Securities Industry: Causes and Cures..
CC. The Role of Banking in Elimination of the Stock Certificate_
DD. Seminar-Is the Stock Certificate Necessary?.

2159

2306

2367

EE. The Multiple Causes of Fails in Stock Clearing in the United States (Volumes I and II).......

FF. A Securities Handling System for the 1975 Era-Report to New
York Stock Exchange-.

2413

2560

2596

GG. Reducing Costs of Stock Transactions: A Study of Alternative Trade
Completion Systems-Vol. I: Summary of Results___
HH. Reducing Costs of Stock Transactions: A Study of Alternative Trade
Completion Systems-Vol. II: Evaluation of Selected Alternatives. 2616
Reducing Costs of Stock Transactions: A Study of Alternative Trade
Completion Systems-Vol. III: The Trade Completion Simulation
Model..

II.

JJ. Reducing Costs of Stock Transactions: A Study of Alternative Trade
Completion Systems-Supplement to Vol. III: The Computer
Program

2676

2768

KK. A Presentation for the Elimination of the Stock Certificate, by
Compute-O-Gram Systems, Inc.---

2850