The new Commercial Code of 1899, providing expressly for the foundation of joint-stock companies whose shares would all be taken over by the promoters, further strengthened this tendency. Meanwhile, regulation of the activities of the numerous stock exchanges by the government was largely ineffective, and the exchanges themselves, as profit-seeking joint-stock enterprises, had little incentive to put their own affairs in order. The Exchange Law of 1893 was indulgent to the narrow interest of members and brokers. Deferred and term transactions, rarely involving actual transfer of ownership and essentially speculative, remained legal. The potential for abuse, involving secret transactions and price rigging, was enormous.
