March 6, 1999

Jonathan G. Katz
Secretary 
Securities and Exchange Commission
Mail Stop 6-9
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: proposed amendments to Rule 15c 2-11
    File No. 57-5-99

Dear Sir:
	Although the intent of the proposed amendments to Rule 15c 2-11 is 
well meaning, the proposal should be rejected because:

(1) it will not accomplish its intended purpose,
(2) it will hurt innocent people, and
(3) its effect would be anti-competitive.

A Specific Example
 
	For a number of years, I have been a shareholder in Randall 
Bearings, Inc. (symbol RBRG). Randall Bearings, based in Lima, Ohio, is 
a manufacturer of various types of bearings. Organized in 1918, the 
Company went public in 1946 at $3.50 per share. It has under 500 
shareholders, and to the best of my knowledge, is no longer a reporting 
company. The Company is small (annual sales under $10 million), but very 
sound (5.3 to 1 current ratio, almost no long-term debt, net income over 
6.5% of sales). 
	Randall Bearings currently has four market makers and is quoted 
9 3/8 bid, none offered. At the bid price, the stock is priced at about 
70% of 12-31-97 book value and about 6.5 times 1997 earnings per share. 
The Company reports to shareholders just once per year, typically 5 or 
more months after year-end. 
	Is Randall Bearings an isolated example? There are hundreds, if 
not thousands, of small non-reporting companies like Randall Bearings. 
They don’t come to the attention of the S.E.C. because they don’t cause 
any problems. 
Would the proposed revisions hurt shareholders of Randall 
Bearings? Yes. First, the number of market makers is likely to be 
reduced for several reasons: (1) the brief information published by the 
Company with a time lag will make some compliance officers unnecessarily 
nervous, and (2) the trading is so thin, each market maker probably 
averages less than one trade per month. Any increase in the cost or


James E. Mitchell 
March 6, 1999
Page 2

 
regulatory burden of market making will cause some firms to drop out. 
Spreads between bid and ask will widen, as a result. In some cases, the 
trading will shrink down to one market maker eliminating competition 
altogether. In many cases priced quotes will disappear. Valuing these
stocks will become more difficult, creating greater opportunity for 
wrong doing by the intended targets of the regulation. 

Would the Revised Rule Accomplish Anything Positive?

	The 1999 proposal is different from the 1998 proposal only in its 
attempt to eliminate some of the obvious adverse side effects of the 
proposal. There is nothing new in the 1999 proposal that would help to 
make it effective in combating securities fraud. Therefore, the many 
1998 comment letters pointing out the ineffectiveness of the 1998 
proposal still apply.
Conclusion

	For the reasons cited above, the proposal should be rejected. But, 
it should be rejected for additional reasons. The S.E.C. is capable of 
doing better than this. An old expression is that “to be a good hunter 
you need to understand the prey.” If you focus on the behavior of the 
stock manipulators and promoters, you can come up with rules and 
procedures that (a) are effective in discouraging them, (b) don’t hurt 
innocent people, and (c) don’t discourage competition. 

						Very Truly Yours,




						James E. Mitchell