Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-12-13
STOCK EXCHANGE METHODS.
Continued from Page one.)

Consolidated Exchange, including
President Miguel De Aguero, were ex-
amined by Samuel Untermyer, counsel
for the committee. They explained
that under the rules of the New York
Stock Exchange they were absolutely
prohibited from doing any business
with members of that organization
and charged that their business had
been curtalled by the prohibition.
Prior to the examination of the Con-
sclidated Exchange witnesses, the
committee heard several money
brokers operating in the loan
crowd" on the New York Stock Ex-
change. They testified that an en-
forced low rate of interest would pre-
vent the movement of money toward
New York from country banks, when
the money was needed. Just as the
committee recessed for luncheon, Mr.
bntermyer called to the stand Frank
X. Sturgis, of the New York Stock
Exchange. He was the first of a list
of witnesses from the Exchange, who
will be questioned as to the theory
Of It's transactions and as to the spec
ulative character of trade in stocks
listed on the Exchange.
When the committee resumed after
lunch. Mr.. sturgis testified he had been
a member of the governing board of the
New York Stock Exchange for many
years and was its president from 1892 to
1894 He said that the governing board,
which was the executive authority, was
composed of 40 men and that the ex-
change membership amounted TO HOO. He
said that the volume of business, today,
was probably 80 times as great as when
the exchange was organized in 1869.
Then why. if the business has in
creased so much, has the membership of
the exchange not increased proportonate-
ly?" asked Mr.. Untermyer.
II can only say in answer to that.
that the public's business has been well
taken care of by the exchange There
are plenty of brokers to Go their business
as is evidenced by the fact that the price
of seats on the exchange has gone down
in the last few months. Brokers have
been unable to make living" answered
Mr. Sturgis.
Mr.. sturgis said that the price of seats
was now about $4,000, but that as high
as $4,000 has been paid for seat
Mr.. Sturgs said that the limited mem
bership would in all human probability be
extended by the governing board at any
time that ii became necessary" Mr..
Untermyer brought out that failures hao
occurred on the exchange by which GUS
toners had lost their stocks held by All
insolvent member In a case of that kind
Mr.. Sturgis said. the proceeds Of the m
solvent members seat were by agree
ment devoted to liquidating his engage
ments with other members of the board
Mr. Untermyer wanted to know If il was
Just to prefer these creditors. Mr. Stur-
gis said he thought IL was He agreed
to furnish list of failures Of Stock Ex-
change members covering the last 10
years.
Mr.. Untermyer and the witness became
involved in a heated discussion of the
practice of brokers using as collateral
for loans securities deposited by a custom
err. Mr. Sturgis said that such practice
was sometimes pursued, but he pointed
out provisions in the rules of the ex-
change which he said provide for the
repression of the practice.
Mr.. Untermyer elected that II was the
practice for some brokers TO use as col
lateral all stock held for a customer, no
matter how much the customer had paid
on II.
''rhen II the broker goes to the wall the
customers stock Is gomez" asked Mr..
Untermyer
NO. not all OF it,
IF {,aot ~ .