Democratic messenger. [volume] (Snow Hill, Md.) 1869-1973, 1912-12-14

Are Sold Again and Again Within a
Year.
Figures showing how shares are sold
over and over again on the New York
stock exchange without any actual
transfer were presented to the house
money trust" investigation connie
tee In Washington when that body
turned to the stock exchange phase
OF its probe of the American money
market.
The figures were given by Lawrence
w. Scudder. a statistician. who made
q study of the conditions prevailing
on the New York stock exchange for
the last de, ade OF longer. He testified
that the entire capital stock of the
Reading. Erie and many other big
concerns was sold" many times with
In year.
Samuel Untermyer. counsel for the
committee. led Mr.. Scudder through
an examination. the object OF which
was TO show that OF the millions OF
shares of stock traded in only small
percentage was actually transferred
About s per cent OF the sales gener-
ally were bona fide transfers said the
witness.
The tables covered the period from
1906 to date. On an average. MIR.
Scudder said. the entire capital stock
Of the Reading was sold 800 times a
year.
The total OF the Erie capital stock.
he said. listed on the stock exchange.
was l.123.OOO shares. With regard TO
both the Erie and Reading. the wit
ness found the volume of sales was
graded when the shares reached top
prices.
Scudder said his figures on United
States Steel. covering the period from
1906 to the present. showed 1854. 900
shares listed on the exchange. The
1S4.000.000 shares. The sales for 1910
were about seven times the capital
stock listed on the exchange The
transfers. said Scudder. represented
about % per cent OF the shares sold
Amalgamated Copper started out in
1900. Scudder said. with total CAPT
tai stock OF 100000 shares. and at
present there were just about twice
that many listed. On the average
since 1900. the capital stock has been
resold on the exchange eight times a
year On March i5. 1907. one offthe
nstfr do snl D ~.
were sold on the New York S ock ex-
change. The fluctuations during that
month were about forty points.
W. T.. Frew. president of the Corn
Exchange bank. OF New York. ard
chairman OF the New York clearing
house committee. occupied the stand
and was put through grilling exami.
nation By Samuel Untermyer. counsel
for the committee.
Through Mr.. Frw Mr. untermyer
put into the record evidence Of trust
agreements by which Ave men control
two OF New York's greatest financial
institutions. the Bankers Trust com
pany and the Guarantee Trust com
pany. with aggregate deposits OF near.
ly $40O.00O.0O0.
The Bankers Trust company. Mr.
Frew said. was controlled by II. r.
Dawson. George y. Case and Daniel
G. Reid: the Guarantee company by
II. p. Dawson. George r, Baker and
William Porter.
These men hold and vote all OF the
stock OF the companies except enough
TO allow board OF directors to quail.
ify. and under the trust agreements
have absolute authority over the al.
fairs OF the companies. even TO the ac-
QUESTION or merger of other institu
tions.
Mr. untermyer also secured from
Mr.. Frew a description OF the method
by which money was attracted to New
York when small country mere hants
and farmers demand funds for the
moving Of crops or the accommoda.
ton OF their business affairs.
Mr.. Frew said that the money was
needed on the New York stock ex.
change for speculative purposes that
country banks kept large sums on de
post In New York. and that when
the home" demand for money be.
came strong the New York price of
money rose. and the country banks. in
order to gain the big interest charges.
put their money out In call loans on
the New York stock exchange. All OF
these loans are based on stock ex.
change collateral. Mr. Untcrmyer
ELECTED from the witness.