New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-05-06
TWO MEMBERS EXPELLED
Consolidated Exchange to Punish
Others Guilty of IweguIarity.

Soon after the opening Of the Consolidated Stock
Exchange yesterday morning Chairman Valentine
Mott announced from the rostrum that T. H. lDeary
of the firm Of T. il. Leary & Co. Of No a Wall
st. and J. Frank Hale of the firm Of Longley. Hale
& Co.. No. q Broadway. had been expelled "ior
obvious fraud"
Leary has been a member OF the Exchange since
April u, 1903 and Hale since January p 1904
President Randolph said that the two men had
been expelled after long investigation final action
on their cases having been taken by the board %
governors at their special meeting Wednesday
afternoon. Expulsion had said President Ran
doph, under that section Of the constitution or the
Exchange which reads:
Should any member Of this association be guilty
Of obvious fraud. of which the board OF goVeInofs
shall be the judge ne sn9 tupon conTlceoh t
board be expelled.
President Randolph said that the two men had
been found guilty Of obvious fraud and false pre-
tence and practices denoting important irregulari-
I!es.' He refused 10 give the details. As far as
Mr. Hale was concerned he declared, the matter
for which he placed under arrest on Wednes-
day had nothing do with his expulsion, and
the members Of the board knew nothing OF the
affair until they read of it in the morning news
papers.
There was no charge Of 'bucketing' orders
against either Of the two expelled" continued
Mr.. Randolph. They had been under investigation
for some time. Their expulsion had nothing TO do
with the failure of Dr. Woodend. There are no
charges on the Exchange against DR.. Woodend and
nothing has developed in his case To show that he
has been guilty Of anything except bad manage
ment and has been foolish in the conduct of his
affairs"
busy at their desks. They said that Mr..
Leary was not there but had gone out to try 10
settle the difficulty. No statement would be issued
by that firm, it said.
At Longley, Hale & Co.'S office members or
the firm were present. II said that no orders
were being taken. although some customers had
called and asked the firm TO execute orders
The trouble of the firms, il is said, is that
they charged with having started a system
Of interlocking orders. This. it said. is a
new system of bucketing Instead Of the old sys-
tem when either house got order. instead Of
paying against it, it would simply trade with the
other house the transaction appearing on the books
Of the other house If actually executed order
The books, however. il is said, were in this case
erroneous. there being actual execution Of the
order. The system, il said, is practically an
intricate system of interlocked bookkeeping
Hale who was arrested Wednesday evening
was arraigned in the Tombs court yesterday morn
fng before Magistrate Moss. He was arrested on
complaint of Theodore Martin. a merchant, who
alleges that Hale retained certain securities valued
in all at $500 Martin declared that he had depos-
tied the securities with the firm as collateral ana
that since that time he could not get accounting
Louis J. To3haus. who appeared for Hale, asked for
4 Dostponement Of the case. and Hale was held in
5000 bail for examination on Tuesday.
The board of governors OF the Consolidated Ex-
change in session again yesterday afternoon
for more than two hours. and heard number Of
witnesses in various President Randolph said
after the meeting that the board had taken some
very important action. the nature Of which it had
been agreed not TO disclose until the formal
nouncement should be made this morning by the
chairman OF the Exchange. 1t is understood that at
least two. and probably more. explosions will be
announced to-day. Vice-President wagar said:
want 10 say that the action we took last night
and what we have Done tonight have nothing what
do with the WOodend case One Of the
had up tonight has been under in
vestigation for a month, and would have done
what did whether Mr.. WOOdend had failed
not.
Boston, May Sin reference 10 the arrest Of J.
frank Hale, Boston broker. in New-York yester-
day for the alleged larceny of bonds and certii-
Gates Of stock from Thomas f. Martin. T H.
Whitney. assistant manager of Longley, Hale &
Co. Mr.. Hale's firm. said to-day that the whole
affair was in connection with matter of business
Mr.. Whitney said
The securities in question were held on margin
account. There was dispute TO the balance
due and the arrest has been made apparently 10
force a settlement. The sum involved is insig-
niflcant