The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-02-15
HALF BILLION In
STOCK. GAMBLE
Jules S. Bache Tells Leak
Hunters of Market Danger
i'm December.
BORROWED FROM BANKS
Whipple Assails HUTTON and
Barrett-LawsOns Profits
Only About $4,000.

The Eules Committee of the House of
Representatives. which in addition to
hunting for a leak of the Presidents
NOTE TO the bellgerents is preparing to
make n report on certain phases OF the
New York Stock Exchange, went afield
of the leak inquiry yesterday to ascer-
lain to what extent the so-called pub
lie" was in the stock larket on margin
prior to the collapse of prices on peace
Iuinors in December.
A vivid picture of how spectators
throughout the country were playing the
market in December was presented by
1uIes S. Bache. head OF the brokerage
firm of j. S. Bache & Co., who told of n
conference of brokers at that time to
discuss the dangerous condition" aris-
,ns from the nationwide fever for specu-
lation.
Mr.. Bache said that at dinner De-
cember i3 In the Metropolitan Club six
teen nten. representing fifteen of the big
wire houses--that is. brokerage con-
Germs that have leased wires extending
over the country-estimated that their
banks for their customers.
volume Of stocks on Margin.
II was also estimated that these firms
Rad purcha sed on margin for their GUS
toners stocks aegregatiug market
price of some $3.50, 100000, II not more.
answers received from Mr.. Bache and
c,her heads Of big wire houses indicated
that two-thirds, IL not more, OF their
business came from places other than
New York One brokerage house has
wires connecting with correspondents
In sixty-ive different cities In this
country and Canada.
Mr.. Baches testimony was the chief
feature Of a rather interesting day. Be
sides his picture of stock market condi-
lions Sherman l.. Whipple, counsel to
the Rules Committee, brought out from
another witness, Harry Content. Thomas
W. Lawson's broker. the fact that Law
sons profit in the December break was
shout $4,000.
Mr.. Whipple also made a severe ar
raignment of Edwin F. Hutton and Hos
mer Barrett, both of L. F. Hutton & CO.,
!or leaving the city at time when their
appearance before the committee was
necessary. Finally ]. b. Regan. pro-
prictor Of the Hotel knickerbocker, de-
MED emphatically that Joseph Tumulty.
the Presidents secretary. had given him
any tip on the Presidents note.
Mr.. Bache. taking the stand in the af-
ternoon, had with him various data on
t:e transactions OF his firm between De-
cenber IL and December 81. He seemed
10 make a most favorable impression on
the committeeman by his frankness and
his readiness to discuss market condi-
IONS. A previous witness had already
said that Mr.. Bache had told him of a
meeting of the big wire houses In Decem-
ber TO discuss the market situation.
Before. however, Mr.. Whipple led the
witness into that matter he desired TO
Know If J. $. Bache & Co. had increased
their loans from the banks during the
sutumn.
Big Loans for Speculation.
There was a large increase ex-
n'aIned Mr.. Bache, looking at Mr.
Whpplc through his tortoise shell glasses
The situation had reached what
called the danger point. The increase be.
San In November and continued Up to
December ~, At that time our loans
from banks amounted to y51 900. 900.
was lending the public s77,ooo,oOo fol
speculative parposes."
This expansion, Mr.. Bache said. hat
gone on over his protests. He had pro-
rested TO his partners and had writer
letters TO the branch managers and the
correspondents advising caution in tho
r'rchase of stocks on margin. He ex
blaned that on September 80 the loan,
o. the firm from banks had been abou
$4,000 900.
Asked IL there had been any meetns
OF banks 10 consider the situation, h,
smiled and said: IT don't think ther,
was any meeting Of bankers. but on No
N'mber II ! attended a dinner will
some friends at the Harvard Club befor,
gong to the smoker of the exchange a
'he Waldorf At that time / commented
or the cumbersome methods of doini
business in the Street and believed tina
Wose conditions. which prevailed befor
we had become world market, shoul,
be altered
suggested that there should be
meeting. The suggestion was taken u
ana dinner at the Metropolitan Clu
on December 3 was arranged. Their
we're sixteen men, representing fifteen o
NIe large commission houses, present"
IN answer to a question Mr. Bach
rave the names of the following men a
neing present: Gen. George r. Dyer q
" l. Hudson e. Co., Walter Price OF +
Z. Randolph. J. II. wainwright an
John w. Prentiss of Hornblower
weeks Herbert II. Childs OF CLARK
,hilds & Co.; s. b. Chapin Of s. r
'Aapin Co.. Bertrand l.. Taylor. Jr
o. Logan Bryan. Walter Lyon Of Rens
L"rr, Lyon Co +. r. Keech Of F. T
h'ech Co, Henry Rogers Winthro
o Harris. Winthrop & Co.. and Jules s
hache There were others. but Mr.. Bach
''lId not recall them He promised I
submit complete list.
Mr.. Bache's Fears.
NJ Bache said that at the meetin
'n'r" was a discussion OF conditions sue