New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-06-13

Group at the garden party at the SUNNI
L. :. n: Rear Admiral Won Rebeur-l
following the investigation OF the
Hughes committee. He was not inclined
TO give the committee the full credit or
suggesting such action, however ana
said that some Of the governors OF the
exchange had long disapproved of the
unlisted list" and thought all the stocks
should be on the REGULAR list
Mr.. Untermyer asked the reason for
the rule prohibiting members of the
Stock Exchange from trading, or even
communicating. with members of the
Consolidated Exchange.
THE rule was made so that the Stock
Exchange could control its own bust
ness" the witness answered.
lis that the only explanation you care
to make" asked counsel.
Yes, ! think So" said Mr.. Mabon
Little Board" Men Shut Out.
The witness admitted that a member
of the Consolidated Exchange had prac-
tically no chance of selling stock listed
OIL the bigger exchange TO member OF
the latter. but he might sell it "surrep-
titiously" to his bankers, the witness ad-
mitted at Mr.. J1ntermyer's suggestion.
Your purpose is to drive every one
out of the business of dealing in stocks
EXCEPT the members of the Stock Ex-
change is that it?" asked MIR. Inter
myer
No" replied Mr.. Mabon There Is a
large business in selling stocks carried
on over the counter-that is, by men go
ing from office TO office who are not
members Of the exchange, and further-
more Consolidated member can be-
come a member of the Stock Exchange
by buying a seat
you mean he can buy one OF the l'loo
existing seats if he can find any one who
is willing to SELF" queried counsel
Yes" replied the witness
Mr.. JJntermyer wanted to know why
the Stock Exchange rules placed all the
brokers on "a labor union basis by fix
ing an arbitrary charge of one-eighth OF
per cent as commission on all transac-
tions, no matter whether the stock was
selling for S. a share or $500.
Mr.. Mabon explained that the rate was
considered proper charge for the ser
vices rendered. He was not inclined
10 admit that there was any stock
manipulation on the exchange at the
present time. He recalled, however, the
case of S. y. Chaplin & Co, who were
suspended for creating a fictitious mar
ket for Rock Island by boosting the
price by giving an order to twenty
brokers each to buy two thousand shares
Of Rock Island. Rock Island went up 80
points and fell as far back again that
day, Mr.. Mabon asserted.
That was a pretty raw case of
manipulation, wasn't it?" asked Mr..
Untermyer.
Eyes. and we punished them" said Mr..
Mabon.
You punished them pretty severely,
didn't you?" asked counsel.
Rule Violations More Costly.
The witness said he didn't remember
the exact penalty Referring to the rec
ord of the case. Mr.. Untermyer pointe
out that the firm was suspended for
thirty days. Other firms had been sus-
pended for from one to four years, &C.
cording to cases cited by counsel. for
violating the rules which prohibited com
munication with a Consolidated Elk
change member. for having outside tele-
the exchange, for splitting commissions
with a customer and for various other
infringements of the Stock Exchange
rules.
Mr.. Mabon did not think that the
Stock Exchange was monopolistic com
bination because it limited its member
ship TO LOO. He said that any one else
was privileged to start another stock
exchange. Mr.. Untermyer pointed out
that such a project might be very diff
the Produce Exchange, and the kill off"
attitude Of the present exchange toward
the Consolidated Exchange.
James G. Cannon, president Of the
Fourth National Bank, was recalled for
a short time as a witness. He testified
that most Of the surplus of the banks
throughout the country was loaned out
on the New York Stock Exchange. In
this way the whole country contributed
To the operation Of the Stock Exchange
~ he
witness admitted.
And that is what makes possible
these vast speculations, isn't it?" asked
Mr.. Untermyer
Yes, | should think So" replied Mr..
Cannon.
The hearings will he resumed to-day
al IL a. m.
LAKE ERIE MEETING JUNE g.