New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-06-08
MR.HUTCHINSON'S EXPULSION
FORMAL ACTION OF THE STOCK EXCHANGE
TIE DECISION OF THE GOVERNING COMMITTEE AN
NoUNCED-DETAILs OF THE SPECIFICATIONS
VIEWS OF MEMBERS OF THE EXCHANGE.

officially pronounced him no longer member OIL the
board directed the secretary TO read the charge VI
which he had been found guilty business hau
been suspended and no one was allowed TO be pres
emf except members of the board. They crowded
around the rostrum, and although they knew INC
decision that had been reached, they listened 20 the
nronouncnc of sentence in perfect silence. The
reading of the charge and specifications occupied
considerable time, but was not interrupted.
OF the specifications, which were nine IN num-
Der the following were the most important; On
November %, 1880, Mr.. Hutchinson tranfenei
10000 shares Of Western Union Telegraph stock
from Mr. Dunrs account to that of the firm without
Mr.. Dufl's knowledge or consent. The prlce al
which the stock was transferred was 100 while the
lowest price of the stock that day was lO2 ana
highest 1047s. On February % 1881, during what
has been called the bank panic. Mr.. hutchinson
professed to sell for Mr. Duff 300 shares OF stock
hut of these there were 10 actual safes Vi
7,7OO shares which were transferred from one ac'
count to the other This transfer was made Wholly
without the knowledge or consent of Mr.. Duff, who
lost a considerable sum of money yit. On Janu-
airy g. 1851, Mr.. Hutchinson first sold Tor MT. DuH
10000 shares of Western Union Telegraph stock al
SOst to 81. and be then bought for the account vi
the firm 640O shares of the same stock at from
SO7s TO S23a He then bought largely for Mr.. Duff at
day transferred from Mr.. Duf's account to that OF
the firm 3,4OO shares at 81, although all the pur-
chascs except 200 shares that had been made for Mr.
Duff on that day were at higher price than So a.
He again transferred these 3.400 shares, together
with others. amounting IN all to $500 shares, to
two other customers of the firm at prices ranging
from S412 TO S5l2. These transfers were
unauthorized by Mr.. Duff, and, 50
far as he was concerned. fraudulent. On May
%, $780, Mr.. Hutchinson received an order from Mr.
Duff to buy ION his Judgment" 5000 shares of
Western Union Telegraph, and he bought several
thousand shares at from % to 90, and then trans
ferred from the firm TO Mr.. Duii's account LOCO
shares at 06 the highest price. Mr.. Hutchinson, II
was specified also conducted private speculative
account in the office of John Bloodgood * Co.. and
frequently through this account bought from ana
sold To his own firm stocks which the urn was sell
ing or buying for the account OF Mr. Dun: Nulner-
Gus instances of this were presented III elall.
In the operations leading to tie Hannibal ana II;
Joseph corner" Mr.. Hutchinson was engaged
in private speculation IN the stock ny selling
il Short and concealed the fact from Mr.. Dun by
secretly using Mr.. Dutf's stock 10 fill bis own con
tracts. He forced Mt length to confess ms
fault, but did so only partly, ana, concedllhg a
short interest of his Of 100 SHARES, urged Mr.
Dun 10 lower tho price that he might cover MS
own secret sales. In these transactions, which
were taken at IA dom from Kennedy, Hutchinson
d Co.'s books by the committee, MT. hutchinson
The members of the stock Exchange generally
expressed great satisfaction yesterday with the de
cisiOn of the Governing Committee Inc testimony
could lead, i'll the general opinion, ony 10 the one
result. A member of the Governing Committee re-
marked that heihad been disposed to allowAr huich
insOn the very smallest loophole OF escape Dui Whch
he had listened TO the report of tine uD-cOmnitte
he found that the evidence against Mr. Hutchinson
was overw helmlng.
member OF the Governing Committee who has
been closely connected with the Investigation sald
There was severe fight over the question OF cN-
pelling Mr.. Hutchinson he yo:e 1Or expulsion
ought TO have been larger than 1t was he subject
was one which involved the honor OF the Stock Elk
change. The issue was simply one between
honesty and dishonesty. The members
of the Exchange nearly unanimous III
recommending the course taken. They fe.t that the
matter was one of the utmost importance, as IL con
cerned the integrity OF the Exchange as wen az us
relations to pubic. The investigation has been
most thorough and searching. The proof against
MIR Hutchinson was found 10 be overwhelming
The nine charges and specifications on wnlchthe ac-
ton of the Governing Committee was based were
taken at random from the numerous cases lnFestl-
gated by the special committee, all OF winch were
reported be full OF fraud And even these cases
included III lbe report were ohiy Par
of what might have boon produced. Inc
special committee IN Iadt ony t soIapeu
tons / don't see how any man could have DOUBTED
tine guilt OF the accused man. sui. there "eIo
some of the members of the Governing committee
who thought differently. IL was argued That the
discretion gwen TO Mr.. Hutchinson by Mir, Dun was
very great, and that that ought to weigh III any
that il old cases which were beng investigated
extending back for years, and mat many
brokers might not to-day he able to explain
old transactions which may nave been perfectly
legitimate ut the time they TOOK place. Inc deh.
nitIon of the word fraud III the article of the
Constitution under which we acted was also con
sIderatiOn urged against expulsion. 1t was argued
that the fraud of which Nh Hutchinson was
convicted ought to be moro than dishonesty; 1t
ought TO be fraud III criminal sense as Well 10
warrant expulsion. Now. the simplest definition
of fraud Is dishonesty, but l beleNe Alr.
Hutchinsons fraud to be such as to render MN
liable TO criminal prosecution certainly gross
breach of trust is fraud, and there are
plenty OF legal precedents that preclude a
broker from actnT as agent d dhS GI"npds
| have enumerated wero the strongest on which
members refused 10 vote for expulsion. Some eA-
MANNED their negative votes the ground that
action should be deferred Tor a Time The magn-
tude of the Hutchinson case cannot DC exaggerated
Considering the high reputation OF the hrm before
the charges were made, the length OF time covered
by the Duff transactions and the Iargeness OF the
sums involved, the Is without parallel III the
history of the ) Ock Exchange. In tue hye years
during which the firm acted Tor Mr. DUN the
latter's commissions are estimated 10 have
amounted to nearly 81 ,5OOOOO. Ihelr dealings IOr
Mr. Duff at times were 10 the extent OI tens
of thousands of shares Of stock day. here was
strong vote in favor OF eXpelIng Mr. Kennedy. lie
had opposed the right 10 investigate his connection
with the matter on the ground that he had not re-
ouested an investigation. But as he HAD signed MS
name to the reorganization OF the ilrm, the special
committee decided 20 examine INTO his connection
with the charges. His defence consisted oil allega-
tions that he had allowed Mr. Hutchinson to con-
troll and mainly direct the business OF the Drin. Mr.
Kennedy however, had always been around the
office of the firm and he paid part of the 100000
which was paid In the Dun settlement
A member OF the Stock Exchange said " The in
yestgation was made by MI Hutcninson's friends
and that adds sting TO its result. Considering
| the evidence, 1t could have ended III no other way
than expulsion But tine work was terrible 10 those
engaged in it. One man told me that he would
have gwen ST. 900 not TO have been compelled to
20 on the committee. Another member says he feels
| five years older after what he has gone through
There - a feeling of great relief that the matter 10
| over. Even the friends OF Mr.. Hutchinson who
| supported him ia the committee feel that great
| load has been taken OIL their shoulders"
| Another member OF the Exchange said that lie