The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1905-01-13
1T CAUGHT THE LAMBS"
Munroe Brothers Wash Sale" it
Copper Scheme Backed by
Rockefeller Bank.

90" failure, and sensational revelations
are expected tomorrow. when Archi-
bald q. l.oomis. vice president of the
National City bank. is put on the
stand in the bankruptcy proceedings
The Munroe failure has brought out
the story of how two unknown Young
men whose only business experience
was selling of collars and neckties in
a Canadian city came 10 New York
with capital OF $1,000, and in the
course of few months were dealing
in millions and had alliances with some
pf the most influential bankers in the
Wall street district.
These young Canadians laia out -
gigantic scheme Of wash sales on tfS
'urb. by which they expected TO run
up the price of 100000 shares of ths
Montreal and Boston Copper compan?
from 81 u share to Sc. The purpose
was TO unload this stock on the public,
which in that event would have been
ieeced of s3.50o.000.
Wash Sales Catch Lambs.
In his Wall street laundry" 10000
;hares We're sold to the '1ams,s' but in
order 10 do it was necessary to make
wash" tbogus) sales OF 3,0ea,0No
;hares The commission 10 the brokers'
ate up the profits on The genuine sales
and theie WAS u grand collapse. H.
hicll MANY brokers were caught with
The goods ON their hands.
one of the astonishing features of
the affair is that Nlunroe Brothers,
who. if they had gone into wall street
In the ordinary fashion of an outsider.
would have been called lambs" We're
lble TO borrow from the City Nafiona!
bank 100000 u day on unndorsed de
nand notes for eight days preceding
their failure. paying back the loan at
the close of each day. They also sue
ceeded in obtaining large sums from A.
B Leach of l'arson, Leach 81 CO.. one
of the most influential bond loCses in
the United States. 1t is understood that
the bank was reimbursed and that Mr..
Leach WAS protected
great Rockefeller bank, admitted, ac-
cording TO a published interview, that
he learned of these loans three days
before the Mumoe firm failed, He eN-
p!ainet that the loans We're made by
Mi Loomis. vice president of the bank.
backing methods. AIr stillnan an
sW red "Perhaps that vas an error of
Judgment We are AN liable to make
mistakes.
Controller May Investigate.
These transactions have given rise to
reports that the comptroller of the cur
rencN might investigate the great $40
o00000 bank. Local newspapers also
have published runlors that John ".
Rockefeller WAS ansercd and wanted
Nh. LOOMS scalp. but that Ii. II.
Rogers had interren"a to keep the vice
president in his job.
George and Alexander Munroe until
four years ago had - laberciasl1ery III
Montreal. but sold oui and opened an
office as mining brokers"
George Munroe married the sister Of
j. \. GleenShieliS, prominent Mon
treil lawyer. who was interested in va
rious mining schemes This connection
gave the MunroeS good introductions.
but they did II small business until they
came TO New York They opened lux
urious offices with furnishings costing
$4,000. They began to boom the stock
Of the Marconi Wireless Telegraph cOnl-
panN OF Canada ana are understood to
have had considerable success in serl-
ing It,
They were aggressive and cnthnsias-
/ tic young fellows of the type liked III
\ Wall street and they quickly made
friends. MIR. l.oomis was one OF these.
4 and Leach another. and both Of these
\ are names 10 conj3re With in financial
7 circles.
Live in Splendid Style.
The friendship OF men like these thought
other friends to the brothers, and before
long George Mnnroc was rcputcd 10 be Il
millionaire II is said he lived a; the ratc
Of from $4,000 to 100000 year
When the copper business began 10 re-
vive the Munrocs took mp the Montreol
anl Boston mine in British Columbia ar:.l
or5an.zed q syndicate to boom and unload
its stock. LoomiS became chairman of the
4 syndcatc's executive committee and IL
was through his influence that the loans
were obtained from She National city
bank.
The stock was of a par value of 81 Il
share and contract was entered into by
which the persons who were to underwri;c
I yrara to .lp Gtn n.k nj
Various persons went into the syndicate
With the provision that they were to take
on undcrwritc a certain number of shares
laying 81 per share, 20 per cent. OF the puy-
chase price at The outset ana the ualanc.
within certain specified times.
Brokers Ready for Aid.
Brokers who were members of the cx.
.hange were readily found who were wiH
ing to dispose of certain number ei
shares month. and what they receive.
was TO go 60 per cent. TO them and 30 pc,
cent 10 those who had underwrittcn The
stock in the beginning. 1t was then d.
c.dcd that in order TO sell the stock AT /:
price above 81 per share it would be ncscs
sary to resort 10 the process known a.
washing
In other words, they agreed themselse.
to purchase the stock at high figure il
order to set tina: as the market rate. PA
being s.. and they having obtained u a
81. theN arranged tot street sales a g. 81
al s3, themselves buying at that rate il
order to show that the stock was actiy,
M to induce the public to buy at IN,
same price. Lared by this system, on
outsider bought 50,o0O shares at from ST.
10 So.
In disposiag of the stock Monroe &. Nun
roc washed" about 3,G000t0 shares u
more in the process of getting rid of ahou
10000 shares, for which they are said &,
have paid the company not more thai
$I31.G00 in all. The brokerage on raif)n,
this $4,000 is more than 10000 bccaus
they had to pay commissions on the whOi
3,0tS.N0 shares.
The Munrocs would give orders to coy
ia n brokers to sell and TO other brokers 4
buy; when they sold they would get
check the following morning and the
they would use that check, turning il owe
TO the brokers they had employed to bu,
The result was that on December 2 N
day of the failure. they received checks !
payment for the stock sold the day ta
fore and then used these checks TO pa
for stock they had bought the day befor,
but when II came to their raying for sh
stock they had bought on December
thpy had the manav III he .cpd1ss