The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-05-04
"WASH SALES" OF STOCK
SIXTY BANKS ALLEGED TO BE OUT
A TOTAL OF S1,OOO,OOo.
Affidavit of a WaII-Street Operator
Who Lost Money i'm the slump of
the Webb-Meyer Stocks.

NEW YORK, May 3-The slump in the
stock market affecting what is known on
1.-The street. as the Webb-Meyer stocks.
was followed up late to-day by story
that warrants had been issued for the ar
rest of one or more persons in this connec-
ton. The story was that the order of
rests was issued on an affidavit made by
a Wall-street operator, who claimed to
have been feeced, and further affidavits
by members and employees of various firms.
who alleged they knew the secrets of the
deal. 1t was further said that from infor-
nation placed in the hands of Pierre NJ.
Brown, an attorney, it was alleged that
sixty banks in different parts Of the coun-
try are out more than S1,OOO,OOO by stock
manipulations, and the total loss at stake
is placed at from S5,OOO,0OO to $1OOOO,OOO
1t was asserted that Justice Geigerlch, of
the Supreme Court, had Issued the war
rants He could not be found to verify the
statement until late tonight, when he said:
$50 far L can remember, the statements
which have been made are true and the
quotation of the affidavit is correct, though
it must be remembered that 1 have great
many papers to deal with in the course of
a day-of an hour-and without having
them at hard cannot be too certain as 10
what they contain. l remember an order of
arrest issued in a civil action upon various
aftidavits charging false and fraudulent
representa- tinos as TO the value of a GER
tain stock or stocks. 1t was charged in
one Of the allegations Of the complainant
to use the language of the affidavit that
wash sales had been made which gave
fictitious value TO the stock. The order of
arrest was made only for one man, although
L had signed four. Lawyer Brown, however,
only wanted one man arrested and that
was because 1t was feared that he would
get away" Justice Geigerich said in con-
clusion that he not able to say posi-
lively who the man was for whom the war
rant called.
The methods by which the wash sales"
were undertaken, ii is said, are given in
the affidavit as follows: "Orders would be
given to several brokers to sell the stocks
at given figures, and orders would stimuli
taneOusly be given TO other brokers TO buy
these stocks, so that the purchases by the
last lot would be made from the first. In
this manner prices were reported of sup
posed sales, the sales and purchases being
made, all of them, for the same people"
These Suppositious customers, the affidavit
continues, would refer, when making such
transactions, to other supposedly response
BILE houses, which were in reality part of
syndicate, and which would report favor
ably on them. Brokerage firms were or
ganized for the purpose of washing the
sales.
The affidavit, it is said, mentions a num-
ber of banks located in this city, Boston.
Philadelphia, Washington, Chicago and
other cities which are alleged TO have
made loans some of the stocks.
An effort was made tonight TO see \. V.
Meyer, of the firm which has been men
toned as being interested in the Webb
Meyer stocks, but ii was said at his home
he had gone TO Long Branch. At the city
residence of DR.. w. Seward Webb the in
formation was given out that DR.. Webb
not there.
Joseph II. Hoadley. president of the In
ternational Power Company, to-day
ceived letter from DR.. w. Seward Webb
rendering his resignation as a member Of
the board of directors of the company.
Action on the resignation was deferred for
the reason that less than a quorum of Dr.
Webb's colleagues attended the directors
meeting called for to-day. "Dr. Webb's
resignation of course, will be accepted"
said Mr.. Hoadley. HE wrote from Shell
burne farms that he was not prepared TO
stand behind the stock of the international
Power Company, and, therefore, he felt
IT would be unfair 10 all parties if he should
remain in the board. No attempt will be
made 10 detain him, and soon as possible
action will be taken upon the letter of res
ignatiOn."
1t is stated positively that Dr. Webb is
not charged with any offense in connection
with the application for the warrant, nor is
it charged that he received any benefit
from the alleged fraudulent transactions.