The morning news. [volume] (Savannah, Ga.) 1887-1900, 1896-12-31
EXPELLED FROM THE EXCHANGE
Cuthbert and Company Accused of
Bucket shop Methods.


New York, Dec. S0-William Euclid
Young was expelled from the New York
Stock Exchange by formal vote Of the
governing committee at the conclusion of
a session which lasted from $3.50 till 1880
o'clock tonight. Forty out of forty-two
members of the committee were present.
and the vote was said to have been unani-
nous. The charge was fraud.
The charge was in reality against the
firm Of e. b. Cuthbert & Co., stock brok-
ers at No. 80 Broad street. The stock ex-
change authorities dealt with the member
of the firm, who was a member of the ex-
change. Mr.. Young was the partner in
the firm who belonged to the exchange.
he withdrew from the firm on Dec. %
but that did not relieve him from the
charge.
The original complaint against Cuthbert
& Co.. was made three months ago. A
special committee from the governing
committee was appointed to investigate
the business methods of the firm The
committee suspected Cuthbert & Co. of
employing bucketshop me hods or, in other
words, of reporting to customers that they
had purchased and sold stocks according
TO orders, when in fact they had made no
transactions whatever. The committee
discovered evidence that an arrangement
had been made with Jacob E&irkner, a
broker of No. "a New street, and member
of the exchange, whereby Cuthbert Il Co.,
i'm rendering statements to customers, were
allowed to use his name as a broker whom
they had sold to or bought stocks from.
To determine whether such an arrange
ment existed between Cuthbert & Co. and
Mr. Kirkner. a demand was made upon
Mr. Kirkner that he show the entries in
his books and vouchers covering a partic-
ular transaction alleged to have been had
with Cuthbert & Co. He refused to open
his books to the investigating committee.
For his refusal to do so, which was de-
clared to be detrimental to the interest
and welfare of the exchange" the govern
ing committee suspended him from the
exchange for one year.
In meeting the allegations against them,
Cuthbert & Co. engaged Joseph II. Choate,
Edward Lauterbach and John r. Dos
Passos as counsel. The special investi-
eating committee maee a case against
Cuthbert & Co. on complaint by one
D. R. Stewart that they had bucketed an
order which he had given them on Aug.
2S, last. The order was to sell short fifty
shares of Chicago, Burlington and
Quincy railroad stock on margin. 1hey
reported to Mr.. Stewart that they mad
sold the stock to Mr. Kirkner The in
vestigation committee found that The
sale was never made. Mr.. Stewart gave
an order to cover his short sale. Cuthbert
e. Co. charged commission of one-eighth
of 1 per cent for selling and one-eighth
for buying the stock, and also interest on
the stock, which was supposed to be bor-
rowed while Mr. Stewart was short on
the stock. Chicago, Burlington and
Quincy stock at this time had sharp rise
MTr qbnuvpd a
loss The loss as well as the commission
was so much gain to Cuthbert & Co., ac-
cordng to the investigating committees 3
finding.
Mr.. Young appeared before the govern
ing committee and explained that when
the stock was sold short for Mr.. Stewart
it was loaned to- him and when il was
bought it was taken back. The explana-
tion was not considered satisfactory. A
number of witnesses against Cuthbert &
Co were heard. There were other COM
plants against the firm, but the expul-
sion of Mr.. Young made 1t needless to
pursue the investigation of them.
Mr.. Young was one of the Oldest MEM
bers of the exchange in length of mem
bership. He joined May s, 1863.
E. 3. Cuthbert this evening issued a
statement, i'm which he said "The action
OF the governing committee of the stock
exchange against Mr.. William Euclid
Young, lately a partner Of our firm, is,
in our opinion, unjust to the utmost de-
gree. Mr.. Young has been tried by his
accusers. For weeks some of the ablest
men in Wall street have been engaged in
preparing case against him. He was
summoned before a court of accusers, also
judges.
1--WE beg to assure the public that ex
parte trials shall not be permitted to cast
lasting discredt upon any of our methods.
In due season and in proper ways we shall
establish a vindication that no man can
question, however bitter business rival
he may be-"