The Birmingham age-herald., 1912-06-12
HEPBURN ADMITS
 MISTAKE WAS MADE
Calling of Loan Certificates Was Blunder
FEW MEN RULE WORLD
Refuses to Say That Clearing House Should Be Legally Restricted. Frank A. Vanderlip Is
 Voluntary Witness

New York, June I1.-The action of the clearing house in calling the loan certif- eates of the Oriental bank during the aftermath of the panic of 1907, as se- quence of which the bank failed. was ad- mitted today by A. Burton Hepburn to have been mistake. MT. Hepburn was chairman of the clearing house commit tee at the time. Mr. Hepburn, together with Frank A Vanderlip, president of the National City bank, came as voi- untary witness today before the Pujo committee investigating the so-called money trust.
 During his examination MT. Hepburn also conceded that it "may be true" that few men in New York practically doni- nate the money situation in this country and throughout the world.
 Mir Hepburn after testifying that in eff feet he had promised the Orientals direc- tors that the clearing house would stand by the institution ''until the last ditch, said that if he had been in New York at the time the Oriental's certificates and those of the Morse institutions were called. The did not think the banks would have failed.
 Both Are Cautious
 MT. Hepburn, as did MT. aVnderlip, re- fused to say that clearing house should be put under legal control. but admitted that if the rule fixing a common rate of taxation among banks for the collection of country checks were abrogated, small CT banks would be able to compete with the larger ones.
 The witness said the failure of Con- gress to enact adequate monetary legis- lstion was the reason why clearing houses were obliged to extend their ac- and especially in the issue of clearing house certificates in time of financial panic.
 The banker in advocating the central re- serve plan as proposed by the monetary said that it would greatly lessen the constantly growing concentra- ton of money in this city"
 The committee also took up today the functions of the stock exchange. but got little satisfaction from George w. Ely of the exchange. as witness
 Ely's Memory Poor
 MT. Ely's memory proved to be very ooor, and the sharpest kind of question Ing by Attorney Samuel untermyer failed Lo elicit information that the committee was seeking.
 MT. Untermyer read a clause in the reg ulations on exchange which provides a penalty of expulsion for any member who. has communicated directly or indirectly with any member of the consolidated stock exchange. the little board,'' re- garding stock exchange transactions.
 The witness admitted that no new mem ber can be admitted to the exchange un- less there be a vacancy or some one sells his seat. Then he must pass the mem- bership committee of 15, and 10 of them must agree that he can be a member.
 "So he must be admitted by the commit tee before he can compete with the other ?" asked MT. Untermyer.
 He has to get 10 white ballots before he can be member. I don't know any thing about competition" said the wit ness.
 ''The stock exchange is not in any busi- ness"
 But the stock exchange charges fee for listing stocks and bonds, does 1t not?'' asked Mir Untermyer.
 "Oh, yes, $50 on the million, but that Is not business"
 Puio Answers Vanderlip
 When the House money trust inves- tigation was resumed today MT. Pujo of the inquiry committee made public a letter written by him in which he answered the accusation that the con- mittees disposition has been not so much to ascertain the actual facts as to limit the evidence Sd as to support, If possible. a preconceived assumption.
 MT. Pujo's letter was addressed to Frank A. Vanderlip, chairman of the New York clearing house committee, who had made the charge. The letter said it was manifest MT. Vanderlip had not read the record of the inquiry and declared that all persons having knowl- edge of the situation have been invited to appear. Instead of doing this, Mir. Pujo wrote, MT. vanderlip had used un- methods.
 Charles Levy. director of the Oriental bank, was the first witness. He tes- tified the Oriental was adequately sol vent when it went under in the year of 1907. Frank A. Vanderlip was next questioned.
 This concerned the collection of out side checks by clearing house banks which it had been alleged netted a profit of s50o.000,000 per year.
 vanderlip's Views
 MT vanderlip said that he thought it was perfectly proper for the banks to bind themselves to impose tax on the checks.
 He added that he did not believe fix ing rates was properly a function of clearing houses. Referring to the state ment mado by Mir Vanderlip. MT. Un- termyer said that he presumed there would be apologies to the committee for anything contained in the statement that was false"
 "I would with pleasure,' said MT Vanderlip.
 MT. Untermyer referred to that part of the Vanderlip statement that charged that the $50, ,000, ,000 tax on col lection of checks was not testified to by a witness but emanated from coun- sell"
 The attorney went over Scherrer's testimony with the result that Mr Van derlip said:
 .I do not think Mir. Scherrer knows what the figures amount to-"
 He admitted that he himself did not know. Witness refused to concede that the clearing house should be subject to