The Washington herald., 1908-08-25

New York Aug. 4--The governors Of
the New York stock Exchange met after
[ the close OF the market to-day, and
promptly ard unanimously ordered a rigid
( investigation Of fictitious transactions on
/ Saturday. when there were sales Of more
than a million shares in eleven stocks
/ The investigation Will be conducted by
a committee 10 be appointed by Presi-
dent r H Thomas. who cut short his
vacation when the wires brought him
/ news of Saturdays extraordinary devel-
OpmenJs- President Thomas viii an
nCunce tomorrow the five stock exchange
members who viii constitute the commit
tee
! Tiee governors were in session no longer
than i've minutes. The only broker be
/ fore them was A O. Brown, head OF the
[ hrm of A o. Brown & Co, 80 Broad
street Mr. Brown was there 10 explain
why his firm had been twelve hours late
I IN getting its ehaat % the stock exchange
l clearinghouse. and why il had failed 10
make deliveries at 2:l5 O'Clock. the stated
! time for deliveries on Monday. fer Fri
days and Saturdays transactions COM
/ bined- His explanation was accepted as
I far as concerned the reason for the de-
I lay. but without bearing upon the char
acter OF the transactions involved.
Largest Business on Record.
! Before the governors met. the sheets Of
/ A o. Brown & &c. had made il evident
/ that the firm on Saturday had transacted
Z a volume Of business uever,lsfore equaIed
I by any one house In the history Of the
exchange. There was nothing in the
/ paImy DAYS of John W. Gates house OF
I twelve partners.' 20 compare with it. and
nothing ia the operations OF James r
! keene TO equal IT, The stock exchange
authorities would not give OUT the exact
I figures. but q generally accepted report
{ had II that the firm appeared on the
/ sheets 20 the extent OF more than 700.e1
shares
{ a represantative Of the firm confirmed
I .his estimate late in the afternoon In
f the two hours Of business on Saturday.
I he said the Srm had traded In the vast
total OF 1.111-6a1 shares on that day there
were sales OF I-1Isll0 shares and since
/ on every transaction there is both sale
and a purchase. this statement showed
that this one firm had orders represe1tiug
/ thrze-fourths Of all the sales and pur-
chases made. No one house. experienced
I brokers said, had ever before attempted
{ transactions Of such magnitude Many
o. them insisted -ra- no other house had
I ever considered 10 q possibility 20 deal in
/ stocks al the rate Of 1850 shares a min
ute
said 20 Be Impossible.
I Il was a physical imposslbHity. as was
shown very plainly to-day. for any
brokerage or banking house en- the street
I 20 clear all these transactions In a single
Z day. The rules Of the exchange are very
striC- IN regard 20 deliveries T. IS ueCes-
I ssry for every certificate 20 be trans
ferred l- exact compliance with we'll
{ defined and intricate rules and IL is nee
4 essary for every house to make careful
and extended records OF every IrarsaC-
Z tiOn. the number u the certificates sold
l the name Of the original holders. the vari-
Gus assignments OF the cert lGcate- the
I price at which u was sold. the name OF
I the purchaser and so on Extreme care
/ must be exercised in the examination Of
Ia certificate. and the work OF bookkeeping
I when business Is heavy IS enormous
/ All these things take time They took
! the partners and clerks OF A o. Brown
l & Co. all the time from the close OF the
I market at noon on Saturday 10 this
I afternoon and then the work was Mt
/ finished. The cteariug-house sheet alone
which. under the rules Of the exchange
must be fled four hours after The close
I Of business. or at O'Clock on Saturday
/ afternoons, was not ready until o'clock
/ Sunday morning or twelve hours after
+ the stated time For this tardiress. in
/ evitable though IT was. the frm was Gned.
/ It was reported in the amount Of S3i0.
No Lack of Money.
/ There was TO suspicion Of any failure
/ Of delivery on account Of financial en-
! barrassment- They were physical deIiv-
cries entirely and financial difficulties not
/ at all under which the firm Iabored- A
firm representative refused 10 comment
/ on the source Of the sudden outburst OF
4 the firms extraordinary business activity.
saying tnat It would be the height OF i'm
/ propriety for a firm 20 give any intima-
I ton Of the identity Of its customers. He
( also refused TO discuss the market posi-
tion Of the house. whether on balance II
I had bought r sold Il was insisted. how
ever. that none Of the firms orders had
{ been matched orders
I The firm may have had orders from
I one customer" it was said. ''to sell a
block Of stock and at the same time from
! another customer TO buy a like amount
/ Of stock. # the brokers % whom We gave
these orders for execution happened 10
I deal with each other 1t was pure scCi-
dent and not at all a designed manipu-
I iation or matching Of orders"
/ Mr.. Brown is understood TO have given
q similar explanation TO the governors of
!
/ was said. that the firm had actually
made deliveries OF $4,000 shares of stock.
l The committee TO be appointed by
| President Thomas viii probably begin its
Z work tomorrow II will investigate. an
officer Of the exchange said. not only the
! charges Of matched orders, but Svery
! other feature OF Saturdays business and
/ VIII run down every report of transac-
tons detrimental to the interest Of the ex-
! charge.
The section Of the stock exchange con
. stitution relating TO matched orders is
! section s Of article g All fictitious
transactions are forbidden by IL and a
penalty Of suspension for a period not
! exceeding a year is provided Though the
/ committee VIII go into everything. it Is
/ certain that evidences Of violation of this
section viii receive particular attention.
UNCLE JOE" CUTS UP AT CONEY
Can't Keep StiH when the Band