The San Francisco call., 1910-05-27
STOCK EXCHANGE
SUSPENDS BROKERS
E. F. Hutton & Co. Suffer for
Advancing Salary of Nam
ager of Department

Notice was received yesterday by r.
E.. Mulcahy, local. manager for the
well known brokerage firm of E. f.
Hutton & Co. of this city and New
York, of the firms suspension from
the New York stock exchange for the
period of one year for the infraction
of one of the bylaws of the exchange
Although unexpected, the suspension
will not Interfere in any way with the
firms business or financial standing,
and transactions will be carried on
through the local office just as before
The suspension was the result of the
ruling of the governing body of the
New York stock exchange to the effect
that, in advancing the salary of the
manager of one of its departments, the
firm of e. r. Hutton & Co. was guilty
of violating a rule of the exchange
prohibiting the payment of money to
an employe for creating business The
implication that such reason dictated
the advance in the salary of the en-
ploye in question is denied, however
by both the New York and San Fran
cisco heads of the brokerage firm.
BUSINESS NOT AFFECTED
While the order of suspension will
prevent Z. F. Hutton & Co. from active
dealing on the stock exchange, ar
ran gements have been made so that the
| firms business will ;. be carried on
! through other firms without interfer-
| ence in any way. 1t is generally un-
| derstood here, and advices from New
| York yesterday bore out the belief,
that the penalty will not be exacted in
/ full and that the suspension will be
! withdrawn within a few weeks.
! ", ciO In 1,o
| firms dealings on the cotton exchange
nor the continuance of it's wire service
carrying the quotations of the New
York stock and other exchanges. r..
E. Mulcahy, the manager of the local
office, said yesterday:
THE suspension of our firm for one
1 year by the New York stock exchange
will in no wise interfere with our
business. Our people thought that they
were living within the rules of the eX-
| change in advancing the salary of MIR.
Barrett, who has charge of the firms
cotton department.. but the exchange
ruled differently"
FIRM EXPLAINS ACTION
1 Mulcahy yesterday received the fol-
| lowing telegram from the New York
office of the firm explaining the mat
ter of the suspension:
New York City, May 25 1910.
/ r. c. Mulcahy, San Francisco.
AS a result of a case which was
| brought againse US before the New
York stock exchange, which case
we won, it developed in our testi-
mony that we were employing a
Mr.. Barrett on salary. We testi-
| fed that Mr.. Barrett came to us,
in charge of our cotton department,
in the year 1906, on a salary of
$4,000 per year In 1907 it was at
the same salary, $4,000 per year.
In 1908 we increased his salary TO
$4,000 per year. In 1909 we in
creased his salary to $4,000 per
year. We stated to the committee
was approached by three other
houses, who wanted to employ him
on a very attractive salary. We
/ explained that we looked over his
| business and found that in the
| three years previous to 1909 he had
paid us in round figures about $780,
! salary for the reason that we be-
| lieved him to be very valuable
man and considered that he was
worth his salary
The committee has taken our
statement to imply that the salary
which we gave him in 1905. was
| result of the business that he cre-
| ated for E. F. Hutton & Co. during
the three preceding years and ac-
| cordipgly has found us guilty of
violating section, 1, article "a of
! the bylaws of the exchange and
has accordingly suspended us for
one Ms year, are absolutely innocent of
this charge, for we did not increase
| his salary as a result of the past
business and we so explained to
n the committee. but it has found US
U guilty of paying a man a salary
for creating business.
We will continue our business
the same as heretofore and hope
that our friends will show their
| faith and consideration in continu-
ing us their confidence
Arrangements have been. made
for the same prompt executions of
business as heretofore and we will
continue to finance our business as
heretofore so that people giving us
/ their business will enjoy the same
service and consideration.