The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1909-01-16
STORAGE EGGS As
/. PLEDGE FOR BIG
MONEY LOANS
PROBING OF MERCANTILE Ex-
CHANGE WHICH FIXES PRICES
ON BUTTER AND EGGS IN U, S.
PROMISES SENSATION.

NEW YORK. Jan. 16.-While Meth
er the chairman nor any individual
member OF the committee OF nine,
appointed by Gov. Hughes TO inVesti-
gate Wall-st gambling, will say
word officially for publication, II ID
known that the probing OF the New
York mercantile exchange Is expect
ed To lead up TO "A network OF ramln-
cations In the financial district, and
the possible exploitation of the meth
DDS OF one trust company that loaned
money with tens OF thousands OF cold
storage eggs as collateral. To the
general public the Mercantile exchange
is almost unknown. but 10 the farmer
and the dairyman. and the immense
army OF householders IN New York. II
is OF vital and continuous Importance
inasmuch as IL fixes prices for con
sumers of eggs. butter and cheese
throughout the United States, and its
controllers, known as the Big Five.
turn over something like hundred
million dollars year in trade.
The exchange. which decides what
the producer shall receive, and what
the consumer shall pay. possesses
what is regarded as the most valuable
charter ever granted 10 an industrial
combination in this country. and In
the exercise of its powers II reached
a point OF such arbitrary arrogance,
that In July. 1907, suit was entered
to restrain IL from issuing or publish
ing quotations OF the values in the
New York wholesale market Of any OF
the grades of butter at other than the
selling values of the same. common
ly obtainable. as shown by wholesale
transactions at first hand
The proof was so palpable that the
exchange fixed prices to suit itself
and for its own benefit that a per
emptory order was issued by the court
restraining the exchange from making
quotations except al the market sell
ing value.
1t is TO determine whether this man
date has been observed in letter and
in spirit that the Hughes committee
will make its investigation. through (
its subcommittee on commodities. /
which consists of Edward d. Page and I
Prof. John b. Clark.
"Biq Five" Of the Exchange.
Up TO the time of the legal proceed
ure, IS months ago. the New York
mercantile exchange, immune from
investigation or criticism since the
a law unto itself in the regulation OF
the prices OF two important staples.
The buying and selling price of the
butter and eggs OF the United states,
valued at more than billion dollars.
was regulated by committee on but
ter quotations and a committee on
egg quotations. The producer and 4
the consumer had no appeal. The
dominating power OF the exchange,
known as the Big Five" consisted
of Droste & Snyder, Fitch, Cornell 4
Co, Petit X Reed. thinner and Dun
kak, and ID. w. Whitmore & Co.
Independent dealers had TO submit
to the dictation of the exchange or
be driven out of business. and ii was
not until G. w. Martin & Co. firing OF
the arbitrary methods exercised in
restraint of trade and competition. in
stituted legal action. that the bosses
of the exchange saw that their char
ter was threatened with revocation.
The action was brought in Kings
county, before Justice Walter Fl. Jay
cox, through the law firm of Clark a.
Taylor. of Brooklyn, In which 1t was
alleged that the exchange issued false
and fraudulent quotations; that the
practice as pursued was fraud and
imposition on the shipper; that the
so-called SETTLING basis of prices
was a subterfuge-"a child Of the mo-
ment, conjured TO relieve distress
when a pleaded defense was shatter
ed beyond repair The blunt charge
was made that the exchange deliber-
ately underquoted the market and
thereby was guilty of fraud.
Scored by a Judge.
In an exhaustive review OF the facts
Justice Jaycox found that the ex-
change had published quotations OF
a certain grade OF butter. which in
a vast majority of cases were untrue
and not representative OF the selling
value of the article. and that the said
untruthful quoting of the market. by
the defendant, has been and continues
TO be wilful. deliberate, Intentional.
fraudulent and systematic
The court called attention 10 the
fact that this was a wilful violation
OF the charter requirement that the
exchange diffuse reliable and accurate
Information and that the quotations
were q wide departure from the de-
PENDANTS charter powers. II was
about as bitter an excoriation as was
ever delivered. The decree restrain
ing the exchange from publishing quo
tations of values of the New York
wholesale butter market other than
the selling values was entered July
16. 1907.
II was the first real fright that the
bosses of the exchange had expert
enced. and for while they were SO
good that butter. msquoted or other
wise, would not melt in their mouths.
but with time their contrition became
less sensitive.
There was a twinkle in the eye OF
Chairman Horace White when he
said:
Il hear there is some form OF spec.
ulation in the Mercantile exchange.
The committee on commodities will |
investigate"
Scarlet Fever at Cornell