New-York tribune., 1908-08-25
STOCK EXCHANGE PROBE
SALES INQUIRY
All of Saturdays Huge
Business Done bY One Firm.

Aroused to prompt action by the character Of
the trading in the two-hour session of the stock
market last Saturday when over million shares
were dealt in and many matched sales were
alleged to have been made, the governing com
mttee of the Stock Exchange at an extraor-
dnary meeting after the close of business yes
terday afternoon decided upon rigid lnVesuga-
ton to determine whether or not there were any
fictitious transactions in Saturdays operations
With this end in view a resolution was adopted
authorizing President Thomas to appoint com
mttee Of five members of the governing COM
mttee to investigate the entire business on the
floor of the exchange the day in question
The penalty for matched orders Cfctitious trans
actions) under the rules of the exchange is
suspension for not more than one year.
Virtually two-thirds of Saturdays enormous
business. it was learned yesterday. had been
done by the firm of A. O. Brown & Co rep
resentative of the firm admitted that 1t had
done business of 100000 shares, but refused TO
say whether it long short of the market
for whom it had been operating. Asked If it
was Thomas w. Lawson. he replied that the
firm never made known the identity of its Gus
toners. He stated positively, however. that the
firm had not made any matched sales, and said
its books We're open at any time to any fnvestl-
CATION the Stock Exchange authorities wished
to make.
Regarding report that A O. Brown & Co.
had been unable TO deliver several thousand
shares of stock, this said that there mad
been delay in making deliveries, due to the
magnitude of the business done on Saturday
which had made it a physical impossibility for
the clerks although they had worked all Satur-
day night and Sunday, to get all the deliveries
ready in time. and to the further fact that
number Of the certificates received by the firm
IL; ,rp.lny he
rules of the exchange and had to be sent back
to the original owners for correction He added
that all deliveries would positively be made to-
day
Resides A O. Brown & Co. only about half
a dozen firms were actively engaged in Satur-
days market. Considerable comment was
caused by the fact that the head of one Of these
firms is an officer of the exchange. While
those concerned declare that the trading on Sat
urday was real business. Wall Street does not
believe it and members of the governing COM
mittee of the exchange and conservative bro
kcrs expressed themselves in bitter terms over
what they called the scandalous proceedings
in saturdays stock market"
Many brokerage houses refused TO accept or
ders on Saturday because of the way in which
the market was being manipulated. one firm
alone turned away an order for :f6,Nt' shares.
Complaints were received by the Stock EN-
change authorities yesterday from many bro
kers that they had been unable to execute small
lot orders Saturday either buying or selling
although the order would be at price above or
below the prevailing quotations. as the case
might be. According to one broker. this was
because the smaller lots were real transactions
and had not Leen matched.
Saturdays furious market the one topic
Of conversation In the financial district yester-
cbara of he trading
for general condemnation from bankers and
brokers alike. It was pointed out that the kind
of business done Saturday would not only
injure the standing of the exchange in the
public mind but would prevent il from per
forming its legitimate functions. Brokers also
feared that it would have the effect of bringing
on legislative investigation. That Saturday 3
.'jamboree' one broker called it. had fright
ened people out of the market apparent
yesterday when the total transactions for the
fve-hour session were only 3s62o1 shares. COM
/ pared with 1889 900 in two hours Saturday.
The commission business was practically dead
yesterday Foreign traders would have little
to do with the market, and the operators on
Saturday. whoever they were. evidently
afraid do anything when they learned that
the governing committee of the exchange had
started investigation purely traders mar
ket the result
The cause of the tremendous dealings Of sat
urday remained about as much Of a mystery Is
ever yesterday, although most brokers were in
clined to credit the manipulation to Lawson ami
his discretionary pool Another theory advanced
was that private arrangements had been made by
which certain interests which We're heavily short
of the market were permitted to cover their
lines on the floor of the exchange at stipulated
prices In fact, there dozen theories 20
account for the transactions on the closing day
of the week. but it was obviously impossible to
verify any of them.
Much satisfaction expressed in Wall
Street when the intention OF the Stock Ex-
change authorities to make thorough nves-
| tigation of Saturdays transactions was an
nounced. 1t is generally believed that the com
mttee of five will go to the bottom of the affair.
and that if there any fictitious transactions
| the guilty parties Will be severely dealt with.
The governing committee has the power to
| anime all the books and papers of every member,
and make him account for every transaction,
A member must tell for whom he bought and
for whom he sold and in this way the committea
| can learn whether the orders to buy and sell
were given by the same person.
This is said to be the first time in the history
| of the exchange that entire days business
| has been under investigation. one the first
things the committee will do Will be to sean
| closely the Clearing House sheets covering Sat
urday's transactions. to see if they correspond
| with the number of shares traded n and to as
! certain whether the transfer tax and brokers'
| commissions on these reported sales have been
| paid. If they have not it will be certain evil
| dence that they matched sales. The Clear
| ing House sheets give the names of the brokers
who handled the orders it will be easy for
the committee to find the guilty parties. if any.
NOISELESS RIFLE TESTED