The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-01-24
Governors Protest That
They Lacked Power Proves
Unavailing.
WALL STREET SEES
ATTACK ON CHANGE
Some Brokers Say They
Prefer Jail to Disclosing
Condolences.

The first day of the inquiry i'm this
city by the Rules Committee of the
House Of Representatives into the Will
son note leak and the accompanying
treak Of prices on the Stock Exchange
haG two extraordinary features.
First-The board OF governors Of
the New York Exchange. after formal
protest were compelled in the face Of
the threat Of the issuance of sub
pGnas to every member Of the ex-
change to request all members to pre-
pare for the Congress committee a
statement oi the STOCK dealings OF
every client between December 10 and
December 23 inclusive-the period inn
mediately preceding and following the
publication here of the Presidents s
ilentic note to the warning Powers
asking for statement Of their peace
terms. The exchange governors also
requested every broker to say whether
lie had received from a foreign capital
any sdvauce news Of the note.
Second-Thc inquiry under the direc-
ton Of Sherman L. Whipple, the Boston
attorney, broadened out to such an eX-
tont, covering almost every phase of the
activities of the Stock Exchange, that
brokers said frankly that the exchange
itself was now under formal investiga-
tion. The brokers received the impress
sion by the line Of questioning. they said,
tat the Congress committee is not con-
hning itself TO ascertain whether there
vas any grapevine between the
White House or State Department and
Wall Street. or between some foreign
capital and the Street. but is extending
into an investigation of the exchange
itself. That impression gained ground
despite the statement Of Mr.. Whipple
that the committee will not make any in
curry into the workings Of the exchange
Experts Uncover Data.
The board OF governors OF the eX
change had promised Mr.. whipple or
Monday that the sheets Of the exchange
clearing house committee showing prac
tically all the transactions Of the ex'
change for the period under inquiry
would be available. In fact the ex
pert accountants we're working on then
on Monday and deyeloped. 1t is said. i'm
portant information showing the shor
selling Immediately before the publica
tion OF the peace note.
When President Henry G. s. Noble o
the New York Stock Exchange was ol
the witness stand before the commite
W the Custom House in the morning h
vas directed to lay request OF the com
, n,'ttee before his board Of governors
a'his request was that the Board AS
nN.Ar <ST 81, vnhn n N
pare complete list OF every client
dealings on the exchange for the perio
Indicated and that every broker ais
state how much stock he had borrowe
o. lent on each day OF the period speci
Ned. This information was sought I
t'ace the big short selling accounts sal
te have existed in December.
To these two requests the Congress
committee later in the day added
third namely that every broker b
asked as to whether he had received an
advance news from abroad concernin
President Wilson's note.
The first two requests gave the boar
OF governors great concern. The GOV
errors. meeting Immediately after III
close OF tie market, decided that they ha
no power to make such a demand on III
members. They held 1t would involve
breach OF trust between broker an
Client. and would work hardship upo
thu members. President Noble said
would be unfair to members not mike
up in this affair.""
Threats to Subpoena.
The board accordingly voted to pos
Done action on the question and sci
\ President Noble to notify the Congre
committee still In session to that effec
nv SoA Nt@ ~ 10
Whipple and the Representatives, causs
Them to threaten the issuance of SUI
p@nas TO every broker and the public
ton OF every clients name and his dea
ings
Chairman Henry OF the committee al
Mr. Whipple insisted that the reque
was not a demand; that there was
need OF any modification of the reque
which President Noble suggested shou
be made and practically demanded tn
the hoard reconvene and authorize Z
sending Of the request to the brokers'
\ second meeting OF the board Of 20
ernors was held at $3.50 In the eyenil
! and the request directing the products
OF the data on dealings. loans OF sto
and answering of the question regardi
possible leak from foreign capt.
was authorised to be sent TO the broke
There was an opinion among Sol
brokers last evening that members
The exchange might refuse point bla
TO compile the facts desired SoI
brokers insisted they would 20 TO 4
hrst. The board of governors admit
lhey had no authority to demand
data,
The only two witnesses before I
Rules Committee yesterday were Pre-
dent Noble OF the Stock Exchange =
samuel r. STREET membcr Of the boa
% governors and chairman Of the I