Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1912-12-14
Former Head of New York
\ Stock Exchange Taken
Over Close Examination
as to Practices.
ADMITS OF CHANCE
IN TRANSACTIONS.
Says Manipulations are
Proper if Conducted Le-
ultimately When Quizzed
by Counsel Untermeyer.

Wy OOuIlOOA oA1CNA my ~
Washington, D. c., Dec. 13.-Two
governors of the New York stock ex-
1 change today told the house money
! trust Investigating committee that at
least part Of the transaction In the
stock market were of a gambling ma
ture. 7.
Frank K. Sturgis and Rudolph Kep-
| pier were the witnesses under exami-
i nation. Both are former presidents OF
the exchange.
Mr. Sturgis was led by Counsel
Untermyer for the committe through
long discussion Of the moral aspect
Of .short sales" or sales OF stock
which the seller does not possess. He
| admitted that personally he believed
the moral obloquy" of such trans
action oyercame any argument in It's
favor
ut is not part of my duty to urge
moral reforms upon the community"
said Mr.. Sturgis He took the same
| stand as to manipulation" OF stock
| to higher or lower level by cross sales
and purchases, declaring that the ex-
change as such did not recognize such
transactions.
Mr.. Sturgis held that the duty of
/ the stock exchange toward the pub
lie isssA EstQ jxse, thatsa proper place
rs maintained for buying and selling
and that proper restrictions are
observed
On the question of short sales
Mr.. Untermyer asked:
"As a matter of fact short selling
is just gambling, pure and simple?
Eyes, very largely that" replied Mr..
Sturgis.
Mr. Keppler, who followed Mr..
Sturgis on the stand, declared that
manipulation was perfectly proper
SO long as 1t was legitimately con-
Quoted, the commissions were paid
and there was no collusion.
"Do you agree with the conclusion
OF the Hughes commission that sub.
stantial part Of the transactions on the
! stock exchange are gambling?" asked
h Mr. Untermyer.
Il would say that some transactions
on the stock exchange are somewhat
Of a gambling nature" answered Mr..
{ Keppler
sturgis Again on Stand.
Frank K. Sturgis, New York
broker and former president of the
New York stock exchange, was in the
witness chair again today when the
house money trust Investigating COM
mittee resumed it's hearings
Manipulation of stocks, running of
pools, handling of customers collateral
and rivalry between the New York
/ stock exchange and the consolidated
/ exchange are the principal points
touched upon in Mr.. Untermeyer's ex-
animation OF Mr.. Sturgis. The former
president of the stock exchange testi-
fled yesterday he considered the prac-
tices Of the stock exchange and brok-
ers generally regular and legitimate.
Three members of the committee
were on hand when the session began.
Mr.. Untermeyer endeavored to draw
from Mr.. Sturgis an estimate of the
amount of business done on the New
York stock exchange annually but
was unsuccessful. The lawyer read
from the answers furnished by the
exchange-to questions of the Hughes
commission as an estimate of yearly
business amounting to 196,000,0001
shares Of stock. Mr.. Sturgis said he
believed the figures to be about right.
"Now on that 1876, 100000 shares the
brokers doing the trading received
25 cents share in commission
twelve and one-half cents on each side
OF the transaction, do they not?"
asked Mr.. Untermeyer.
"No, because some of that specula-
tion is for brokers themselves and on
that there is no commission" answer
ed Mr.. Sturgis.
Mr.. Sturgis said that about one
third of the trading was done by brok
ers.
"Then about, 131 100000 shares are
bought and sold by the public?"
Eyes, about that" Mr.. Sturgis said
there we're about 400 or 500 active
brokers' on the exchange.
# Commissions, he said, were charged
on the par value of stock without re-
III gard to the market price.
Mr.. Sturgis discussed the so-called
Rock Island manipulation on Deccm-
bers 27. 1909 when 1t was charged
through S. B. Chaplin & Co., 20 lots Of
1000 shares each were bought on sin
gle order by different brokers. The
stock went from SO to 81 in two hours
and dropped back to below 80 in three
hours more. Mr.. Sturgis said that the
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