The sun., 1917-01-22
'EXCHANGESAFE
IN LEAK HUNT
House Committee Will Not
Probe Institution, 1t
i1ps
Is Asserted. moa,tz
INQUIRY TO BE LIMITED
Investigation Will RcvOlve
Around Sales on Three Days
i'm December.
INQUIRY TO BE LIMITED

The House Rules Committee in the
searching for the Wilson note leak is TO
undertake no general Investigation OF
the New York Stock Exchange.
This was learned positively last eve
ming from committee sources. The COM
mittee believes that its work should be
limited to a search for the leak, IL there
was leak, and for those responsible for
1t and those who benefited by 1t.
Members of the committee and its
counsel. 1t is asserted. are determined to
hew to the line. They feel they were
not appointed to bedevil the Stock En-
change. to pry out chances to reform
the business methods of stock brokers
and to recommend measures designed
to make an end Of speculation.
The committee feels that Congress had
in mind only an investigation of the
leak when the life of the committee was
extended and fresh funds were put at
its disposal so that 1t can conduct the
best and most rigid examination of the
subject In hand within it's broad powers.
Scope of the Inquiry.
The committee will begin its sessions
here in New York at 10 o'clock to-mor-
row morning in a room In the Custom
House that has been set aside for 1t.
The first thing to be done will be to
examine the Stock Exchange sales slips.
showing transactions on December 19.
90 and 81. all of which have been pre-
served by brokers by direction of the
Stock Exchange at the request of the
House committee. The Presidents note
to the belligerents was made public
several hours after the Stock Exchange
closed on December 20, so all significant
sales were made during the period above
mentioned.
An examination Of these slips will dis
close what firms made big sales before
the Presidents note became public. and
from that point 1t Is but one step, even
though an auduous one. to learn which
brokers were selling short and for what
clients.
This initial phase OF the investigation
will mean a vast amount OF work. for
on these three panicky days on the ex.
change 100000 shares changed hands.
Anything to give direction to the work
Of the committee must be found in this
examination otherwise the committee
will run up against a stone wall as far
as the primary purpose OF its existence
is concerned
Books of the Brokers.
From there the trail will lead to the
books OF the brokers' where can be
learned the names of the clients who
made the short sales, II anything Is to
come to light to give direction to the in
quiry the committee will have most OF
its good leads by the time 1t concludes
this phase OF its examination.
Afterward prominent bankers, some
Of whom have been subp9naed, will be
asked to testify. They include J. p.
Morgan. Frank A. Nanderlip and Pliny
Fisk. They will be asked particularly
whether they exerted their influence to
induce the tremendous break In what had
been an immensely powerful bull mar
ket. 1t has been stated in some quar-
ters that the leading bankers Of the city
wanted a sharp drop in prices because
they believed the market had been over
bought. that prices had risen too high
for safety. the risk lying in the fact that
any panicky incident might start the
market downward with a speed that
would bring ruin to thousands of specu-
lators, brokers and banks,
The bankers were afraid OF the situa-
ton. according to this theory. and IN
many ways they did what they could To
aid the break. The chief way was by
marking UP the price OF call money far
ahead OF what 1t had been all fall and
winter, call money one day reaching for
a short time 100 per cent.
NexatiOus Comment.
Committee members have been vexed
by intimations in some quarters that
they are not exerting all the power to
trace the leak because they fear what
they may uncover. For this reason they
will follow their trail as far as they
can see it. and will consume all the time
necessary to lay bare what they find
II is not likely that Mrs. Ruth Nisconti
will be called in the early stages of the
New York investigation.
It is possible that Thomas W. Lawson
will be called again this time to be sub
jected to the cross-examination of Sher-
man i. Whipple, who knows Lawson
and his methods Whipple was described
In Lawson's "Frenzied Finance" as the
only cross-examiner he knew who could
get to the bone.
Mr. Whipple reached New York last
night and went TO rooms engaged for
him at the Yale Club He said that It
was unethical as we'll as injudicious for
him TO talk about the investigation and
his plans in advance of their consum-
nation. He did say. however. that there
was no truth in the report that Samuel
Untermyer had been asked to assist
him.
Mr. Untermyer volunteered to give to
Mr.. Whipple and to Chairman Henry
any assistance in his power said Mr..
Whipple, who added that II any con-
tlngency arose that he thought required
the aid of the New Yorker he would
Immediately ask for that assistance. He
said he had had no conference with Mr..
Untermyer, who is now on his way
South,