Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1905-01-09
Usual Wall Street Condition Re
vcrsed by Lambs Eating Up
the Lions
GIGANTIC "wAsH SALES" SCHEME
Story Of Two Young Canadians Whose
Purpose Was to Unload Certain
Stocks On Public, Which in That
Event Would Have Been FIeeced of
sa,5oo,ooo - Sensational Revelations.


never long without spectacular explo-
sion. Now it is the Munroe 81 Munroe
failure. and sensational revelations are
expected today, when Archibald q.
Iooinis, 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 collars and neckties in a
Canadian city came to New York with
a capital of $1,000, and In the course
of few months were dealing In mill
ions and had alliances with some of the
most influential bankers in the Wall
street district.
These young Canadians laid out gil
gantic scheme OF wash sales" on the
surb, by which they expected to run
up the price of 100000 shares of the
Montreal and Boston Copper Company
from 81 a share to Sc. The purpose
was to unload this stock on the pub
lie, which in that event would have
PcsoOVbSoos
Caught the Lambs.
In this Wall street laundry" $780,
600 shares were sold to the lambs"
but in order to do it IT was necessary
to make wash" (bogus) sales of 81
600. 600 shares. The commissioners to
the brokers ate up the profits on the
genuine sales and there was a grand
collapse, in which many brokers were
caught with the goods on their hands.
One of the astonishing features of
the affair is that Munroe Brothers. who
If they had gone into Wall street in
the ordinary fashion of an outsider,
would have been called lambs" were
able to borrow from the National City
Bank, 100000 a day on unindorsed
demand notes for eight days preced-
ing their failure, paying back the loan
at the close of each day. They also
succeeded in obtaining large sums
from A. B. Leach Of Farson. Leach &
Co.. one of the most influential bond
houses in the United States. 1t is I'M
derstood that the bank was reimburs-
ed and that Mr.. Leach was protected.
James Stillman, president OF the
great Rockefeller bank, admitted, ac-
cording to a published interview, that
he learned of these loans three days
before the Munroe firm failed. He ex-
planned that the loans were made by
Mr. Loomis, vice president of the bank.
When asked for an opinion on such
banking methods, Mr.. Stillman an
swered: Perhaps that was an error
Of Judgment. We are all liable to make
mistakes"
{roy of}
to reports that the comptroller Of the
currency might investigate the great
$40. 600, 900 bank. Local newspapers
also have published rumors that John
D. Rockefeller was angered and want
ed Mr. LOOMS scalp, but II. H. Rogers
had interviewed to keep the vice presi-
dent in his job.
George and Alexander Munroe until
four years ago had a haberdashery in
Montreal. but sold out and opened an
office as mining brokers'"
When the copper business began to
revive the Munroes took up the Mon
treal and Boston mine In British Col
umbia and organized a syndicate to
boom and unload it's stock. Loomis be-
came chairman of the syndicate's ex-
ecutive committee, and it was thru his
influence that the loans We're obtained
from the National City bank.
The stock was Of a par value of IS
share, and contract was entered
into by which the persons who were
to underwrite it were to get the stock
at 81 per share.
Various persons went into the syn
dictate with the provision that they
were to take or underwrite certain
number of shares. paying 81 share
20 per cent of the purchase price at
the outset, and the balance within GER
tain specified times.
Brokers Ready to Aid.
Brokers who were members OF the
exchange were readily found who were
willing to dispose of q certain num-
Der of shares month, and what they
received was to go 60 per cent to them
and 40 per cent to those who had un-
derwritten the stock in the beginning.
II was then decided that in order to sell
the stock at "a price above 81 per share
it would be necessary to resort to the
process known as washing"
In other words they agreed them
selves to purchase the stock at a high
figure in order to set that as the mar
ket rate. Par being IS, and they hav-
ing obtained it at 81. they arranged for
the street sales at $3.50 and So, them
selves buying at that rate in order to
show that the stock was active and
to induce the public to buy at the same
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