From the Stock Exchange point of view it is easy to make out a good
case for working through licence and penalty rather than through the
banning, of the securities effected, from sanction for dealings. By
thus being used as an official weapon the Stock Exchange penalised
itself and its members. By saying "no security not sanctioned by the
Treasury shall be dealt in here," its Committee restricted business
in the House and drove it outside. This grievance was obvious and was
plentifully commented on during the war. If the Committee had pressed
the point vigorously it could probably have forced the Government long
ago to abolish the grievance by making all dealings in new issues that
appeared without Treasury sanction illegal and liable to penalty.
A patriotic readiness to fall in with the Government's desires was
probably the reason why the Stock Exchange refrained from embarrassing
it, during the war, by too active protests against a grievance that
was then more or less real; though it should be noted that even if the
grievance had been amended, the Stock Exchange would not necessarily
have got any more business, but would only have succeeded in stopping
a very moderate amount of business that was being done by outsiders.
But when all is said that can be said for the justice of the case that
can be made by the Stock Exchange, the question still arises whether
it was advisable, at a time when relaxation of restrictions was
desirable in the interests of the revival of industry, to draw tighter
bonds which had been found tight enough to do their work. That the
Stock Exchange should suffer from limitations from which outside
dealers were exempt was certainly a hardship. On the other hand,
since the armistice there has been a considerable expansion in Stock
Exchange business. Oil shares, Mexican securities, industrial shares,
insurance shares, and others in which capitalisation of reserves and
bonus issues have been used as an effective lever for speculation,
have enjoyed spells of considerable activity. With this revival in
progress, in spite of many obvious bear points, such as industrial
unrest at home, Bolshevism abroad, the continuance of heavy
expenditure by the Government, and the hardly slackened growth of
the national debt, it seems to have been scarcely necessary in the
interests of the House to have made regulations which, though perhaps
demanded by abstract justice, imposed new ties on enterprise at a
time when c