The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1912-06-13
Some Unwritten History Of
Wall Street Unearthed
by Committee
LOANED TWENTY-FIVE
MILLIONS AT CRISIS
Adequate Punishment Not Melted Out
to Men Who Manipulate
Stocks Falsely-Ma-
bon Testifies

New York, June 12.-Some heretofore
unwritten history of how ]. p. Morgan
helped stem the panic of 1907 by sup
plying s25. 100000 at a crucial time was
dramatically told on the witness stand
today by r. H. Thomas, president OF
the stock exchange at that time, testl-
flying before the Pujo committee investi-
eating the so-called money trust. MIR.
Thomas said on October "a, 1907, 60 per
cent was being offered for money on call
and none was available. He went to
James stilman. then president Of the
Nationally City bank. and told him S2s,-
100000 was needed. Stnlman sent him to
Morgan saying he would tell Morgan he
was coming.
when l got to Mr.. Morgan's office
there was great excitement said the
witness. Mr. Morgan was in a confer
ence and people were going in and out
steadily. The excitement was intense.
waited for him 20 minutes. He came out
of his office and said to me: We arc
going to lend you s25.ooo,Ooo; and. Go
over to the exchange and announce It,
I said; Allow me to make suggestion,
Mr. Morgan He said: Yes. yes. what
is it?' I think / said, that this money
should be divided up into lots and dis
better effect. Very good suggestion said
he. Perkins, he said, divide that $25,-
600, 900 into small parcels He snapped his
fingers. Perkins was the Perkins referred
to in other transactions
Relieved Panic
Mr. Thomas said the loan had de-
oidad effect in relieving the panic.
Then 1t rested with one man to say
whether the panic would 80 on and do
you think that a dangerous condition.?
Samuel untermeyer asked as counsel for
the committee.
Il could not answer that replied the
witness sotto voce.
Mr. Thomas says that when he went
back to the exchange and announced the
Morgan loan the effect was almost In
stantaneous.
ut popped up in a number of places
instantly. The banks began to loan
money and the rate on call money
dropped back to per cent and then to !
per cent
james b. Mabon, president of the stock
exchange. was questioned at length by
Mr.. Untermeyer In an effort to get him
to admit that the New York exchange
was used as an instrument to concen-
trate the control of securities Of corpora
tions In New York city for the benefit of
the great banks. The witness conceded
that the majority of the collateral ac-
cepted by the banks on call loans was
composed of securities listed only on the
stock exchange and said In turn, 1t was
of great advantage to a corporation to
have its stock listed there.
Reason for Exchange
He was reluctant to admit, however.
that the chief reason why corporations
listed their securities on the exchange
was to give them loanable value. Ma
bon mentioned Standard Oil stock as one
example of an unlisted security available
for bank loans and said he was sure there
were others.
The attorney then raised the question
with the witness as to whether "manipu-
lation ON the stock exchange was not
going on now as wild as ever?'
''Oh, | don't think So Mabon replied.
The stock exchange is trying TO get tie
pubiics confidence. We have fined ana
punished members for manipulation. Cne
of them is S. b. Chaplin. don't remem-
ber the others
.Mr. Chaplin is the man that created a
fictitious market value for Rock Island?"
Yes
You punished him terribly. suppose"
Yes. he was punished
by 30 days suspension7' said Mr.. I'M
termeyer. you call that a punishment
for such a glaring piece of work as that
Rock Island deal?''
The witness was silent.
Have Autocratic Powers
In an effort to show that the various
of the stock exchange were
endowed with autocratic power in the
operation of the institution, Mr.. Inter
never read into the record a number OF
rules and regulations, emphasizing par
ticularly one fixing commissions and for
bidding members to split commissions
with outside brokers' or with customers.
Mabon was asked II he did not think the
latter rule was an agreement In restraint
of trade.
why, any group of men can get To-
gether and start another stock exchange"
Mabon said.
why make such statement?" snapped
the lawyer. You know that you would
kill 1t off like you have choked the con-
solidated stock exchange for 20 years"
Il don't think we are trying to kill off
the consolidated or anything else" replied
the witness with some heat.
What do you call II then? Don't you
know that 1t is absolutely impossible for
another exchange to start under the pres
ent rules?' commented Mr. rntermeyer.
The hearing will be con finllad tnrnnrrou,