Wall Street: The Battle About Fees

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Likely to Quit. Having retreated from positions that the Big Board once vowed to defend, the exchange's Bob Haack gave no further ground in last week's testimony in Washington. He accused the Justice Department of "applying theoretical concepts without supporting facts." Unregulated rates, he said, would cause brokers to switch a good deal of trading from the exchange floor to their offices, creating splintered markets in which ordinary investors would have trouble buying or selling at fair prices. Chairman Gustave L. Levy of the N.Y.S.E. board of governors was even blunter. Justice's proposal, he said, would convert the Big Board into a mere "quotation bureau with limited activity." The reason is that many large firms, including Goldman, Sachs & Co., of which Levy is a senior partner, would be likely to quit the exchange altogether.

It is far from clear whether the exchange's elaborate defense mechanisms will persuade the SEC to leave the fixed-commission system intact. At week's end the Justice Department, which takes a dim view of Wall Street's fears of fee competition, notified the SEC that it will soon submit more evidence to buttress its stand. Never before has the SEC faced such pressures for radical surgery on the heart of the securities business. Even if it should finally side with the stock exchanges, the Justice Department could force the issue into the courts with an antitrust suit. That is a prospect that makes Wall Street shudder.