The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1912-12-13
Chairman of the n. Y. Or
ganization Said This Could
Be Prevented if 1t Was So
Desired.
REFORM NOT URGED
STURGIS ADMITTED
He Also Said He Did Not
Think 1t Wrong to Sell
Stock Short While a Big
Panic Is Raging.
(Natfonal News Association

(National News Association)
WASHINGTON, Dec. 13.-Frank X.
Sturgis, chairman of the New York
stock exchange, admitted to the house
money trust investigating committee
today he could prevent both short
selling and manipulation if it saw fit
to do so. The witness said that he per
sonally did not approve of short sell
ling and when cornered by Samuel Un-
termeyer, counsel for the committee,
as to why he had never urged this
reform in his thirty odd years Of ex-
perience on the stock exchange he
said he was not reading moral lectures
to the other people of the community.
Untermeyer asked him if he knew
of the average daily transactions and
he said he did not.
Did your committee supply the
Hughes commission with data on these
transactions?" asked Untemeyer. The
witness said he did not remember.
Untemeyer pointed out that figures
showed about an average of S96, 600
shares were dealt in during recent
years. Sturgis was not sure this was
right.
"On all these transactions 25 cents
"a share commission was paid to bro
kers, was it not?" asked Untemeyer.
Not all of it. Some of the brokers
may have been acting for themselves.
Somewhere between one-quarter and
one-half the dealings were for brok-
ers."
Commissions Are Varied.
Sturgis said there We're about 400
active members on the exchange on
busy days. He admitted that about
one third of the active business was
from brokers. He said the amount of
commissions varied a great deal, only
two dollars for one share being paid in
commissions for floor business The
varying schedule of commission rates
was regulated by the exchange. Where
the outside public was on both sides
of the transactions tax of 25 cents
share had to be paid to brokers.
rs it not fact that the price of Sc
curities has no effect on the size of
the commission?" inquired Untemeyer.
Excepting mining stock below SO
per value, that is true" answered Stur-
gis
Untemeyer then took up short sell
ling. In the main short selling is spec
ulative," said Sturgis
Short selling is practically selling
something you haven't got asked I'm
termeyer.
Yes" san the witness
rs it legitimate?" asked Untermey-
err
Il think So"
If a panic is raging do you think
it is right to sell stock short to de-
press the market"
II do not think 1t is wrong 1t is pro-
lection for men who have been caught
with a lot of long securities and they
are able to repair their credits under
such conditions"
Sturgis said his idea of the defensi-
bility of short selling was based on the
financial necessity of the person en-
gagged in such transactions. He said
that short selling in a normal market
was a question of morals. He did not
personally approve of it under certain
conditions, and said he had never sold
share of stock short in his life. Ulti-
mately Sturgis admitted brokers'
books in New York would reveal all
short sales. The exchange By periodic
examination of the books could find
out the extent of short sales and man
ipulations, he said.
IF the exchange wanted to forbid
short selling or manipulation could it
do so?" asked Nntermeyer.
The exchange has never met that
issue" was the reply.
Have you urged this reform?"
1T is not my duty 10 give NOR
al lessons to the other people of the
community" answered SUurgis.