The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-12-13
Investigators Traverse
Stock Exchange High
ways and Byways.
THEY HEAR OF OLD
FEUD ON S TREET
Struggle Between Two Elk.
changes Is Told on Witness
Stand - Days Examination
Bristles With Technical Dis
cussions and Involved
Digressions.

! Washington. December 1.-The
! highways and byways of finance. as
! traversed by operators on the New
I York Stock Exchange. were mapped
| out before the House Banking and
| Currency Committee to-day in it's
J money trust inquiry. Frank X. Stur-
! gis. OF the brokerage firm of strong,
, Sturgis & CO. former president and
member OF the board Of governors OF
the Stock Exchange. told the commit
{ tee at length about the ways OF the
/ street
| The examination OF Mr.. Sturgis by
! Samuel Untermyer. counsel for the
committee. bristled with technical
discussions and involved digressicns-
( Mr. Sturgs at times insisted on lengthy
! explanations In arguing questions,
q AID once fatty declined TO answer. His
J counsel John G. Milburn. interfered
/ to preserve the calm dignity of the
, occasion.
The testimony OF Dir. SturSis
! brought out that the membership or
the Stock Exchange has not been in
creased since 1869. when It was fixed at
, Loo Since then the business done
! and the securities listed on the eN-
/ change have increased about fifty times
| over.
Increase Unnecessary.
Mr. Sturgis declared an increase in
/ membership was unnecessary, for the
present membership was well able to
I handle the publcs business. In r
! dozen recent failures. Mr.. Sturgis ad-
/ mitted. stock Exchange houses had
! carried with them stock owned in part
by their customers. but hypothecated
by the brokers for more than the
/ real ownership of the broker In such
/ cases the proceeds OF the sale OF the
bankrupt brokers' seat on the exchange
( goes. ii was explained. not to his Gus
, TONERS. but TO his creditors inside the
/ exchange Mr.. Sturgis thought this
/ was fair and Just. as II was reguia-
( ton subscribed to by the members n
! the exchange and recognized by the
/ public.
! Stock Exchange brokers usually use
the stock owned in part by their Gus
| toners as collateral TO support their
own loans. Mr.. Sturgis said. rehypoth-
! coating the securities for a greater
amount than IS represented in the debt
| OF the customer on the stock He
! added that the governors of the ex-
change would welcome any suggestion
! that would put a stop to the practice
/ He disagreed with a scheme proposed
/ by MI Untermyer that would force
| brokers TO mark on loan envelopes
! containing their collateral the amount
| for which they were already held as
security by the broker. that the bank
! might make it's loan to the broker on
/ that basis This scheme. Mr. Sturgis
/ contended. would entail an almost pro-
/ hibitive amount of bookkeeping
! Mr. Sturgis through a grillng, de-
+ tailed examination. insisted that the
/
. nipulation of the market by pools and
+ syndicates. He said they could not go
/ behind a transaction to discover
} buyers or sellers motives
Argument Is Spirited.
on this point Mr. Sturgis and counsel
for the committee had spirited ar
gument.
rs il legal for a member Of tho
! exchange to give an order 20 sell a
certain amount Of stock to one broker
/ and an order to buy the same amount
OF the same stock to another broker?
asked Mr.. Cntermyer.
so long as there is no COLLISION
and the commissions are paid. it IS
not inegitimate." said Mr.. Sturgis-
THE important point is that the
brokers' commission be paid2~ asked
the lawyer.
Yes"
You know that the object of that
I sort OF transaction is to raise or de-
press the price Of the stOck?'
The ooject is to create an active
market"
- market that appears 10 be ae-
tive. sou mean.
Yes"
| Mr. Tutermyer sought IN vain 70 get
from Mr.. SturSss his view Of the posi-
ton Of the trading public In such =
! traesacticu with the stock at a fic-
( titious hgure. and finally objected to
the form OF the witnesses answers
You are asking me moral queS-
ton. and I'm answering a stock ex-
change question said NJ. Sturgis
with smile. and the COMMITTEES
I laughed The witness insisted that
:hese transactions were beyond tho
/ power % the exchange Tor discipline
80 long a. the commissions were paid.
/ The relations OF the New York eN-
I chance and the Consolidated Exchange
came in Tor a share 81 Mr Sturgiss
attention after the examination % half
Z dozen members q the Consolidated
I Fxrrargr. who declared that the
stock Exchange rules forbid SIS mem
/ pes TO DO business with Consolidated
brokers or any one connected With the
Consolidated Mr.. Stursis asked TO BE-
allowed o. make a statement on this
uo!rt He sid that the Consolidated
haE always heen a competitor Of tie
stock Exchange. and that sor1ct' nrs
-hc feeling q rivalry grew bitter. He
vent on % say that In 1898 the stock
Exchange cndeavored 10 force the
western Union Telegraph Company To
withdraw from the Consolidated Ex-
change feso stock tickcrs over which
The western Union vas delivering
NV YORK stock Exchange aUotationA
The Consolidated took the matter -
court aud retained the ticker
~saEhf s~If-Prcf~cffo.-