New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-25

going TO follow certain lines without
regard 10 counsel or the rest Of the
committed
Chairman Henry explained that he
did not think Mr.. Whipple intended to
impugn the statement Of the witness.
Mr.. Whipple responded that if II was
thought he had impugned Mr.. Noble
he would apologize.
81 want TO say that |. for one, am i'm
pressed with the spirit OF cooperation
. of these gentlemen" was Mr. Clipper
fields closing comment.
Mr.. Whipple then said that he dld
r OF desire 70 examine The witness fur
Their.
Tells of withdrawn Stocks
Most Of the direct testimony Of Mr..
Noble was in regard TO securities with
drawn from the list. He said that
stock in which there is little dealing
because of its scarcity on the market
is usually withdrawn. He also ad-
mitted that "short" dealing in narrowly
held stocks. was dangerous because OF
the inability of spectators to bor-
row IL.
Before Mr. Noble was excused Rep
resentative Bennett wanted to know II
Bethlehem Steel was not ar example OF
a narrowly held stock of the kind which
WIS dangerous for out-of town specula-
tors TO deal in because of the difficulty
in always making prompt deliveries.
81 have read in the newspapers" said
Mr.. Bennett, that Charles NJ Schwab
controls 90 per cent of the stock and
that only 40 per cent is on the market.
Would you call that stock narrowly
heidi"
Eyes, but there is always plenty in
] -. I 1tv1er
that he did not think Bethlehem good
example.
Representative Chiperheld also wanted
to know if stocks were ever held abroad
for purposes of escaping taxation.
NO to my knowledge" replied Mr..
Noble.
In opening the session Mr.. Whipple
asked Mr.. Noble how much time it
would take until he heard from broker
age houses regarding the request OF the
committee 20 have the books of sales OF
these houses available for examination.
I The witness said that il would be diff
cult TO say, that some houses would
| take longer and some a shorter time 20
turn over the information, depending
on the volume of business.
"They all understand speed is re-
CURED" he added.
Asked TO give a more specific answer,
Mr.. Noble said the earliest replies
might be in within twenty-four or
fOrty-eight hours.
"Have you any reason to believe that
the members of the Stock Exchange
will not follow out this proposition in
the spirit in which it was made" asked
Mr.. Whipple.
The witness knew of no reason why
. l.. Sho,,1d of q
TO give the committee the desired in
formation, inasmuch as the board Of
governors of the exchange last night
passed a resolution requesting them TO
do so.
Mr.. STREET, following Mr.. Noble, ex-'
planned to the committee the items APP
pearing on a typical clearing house
sheet-that of an unnamed firm-for
the night of December 10, one of the
dates included in the period under in
vestigation. This document showed
net sales of United States Steel Of To-
600 shares. but did not indicate neces-
sarily that these were short sales. The
exact nature of the sales, it was point
ed out. could be ascertained only by an
examination Of the firms books.
Mr.. Chiperfield again interrupted the
trend of inquiry to ask the witness:
"Are there any government-operated
| stock exchanges?"
Mr.. STREET. replied that the Paris
| Bourse came the nearest to fulfilling
such definition. and he explained that
membership in the Bourse was highly
restricted. as was its stock list
"If ACKNOWLEDGEMENTS exchange
| is doing business pursued the Illinois
Representative, "can one privately
operated exist at the same time and CO.
operate with it?"
yes" said Mr.. STREET., and then he
went on to explain the situation IN
Paris, where, in addition to the Bourse,
there existed the Coulisse-privately
operated which. ne thought, did a
! larger business than the Bourse.
Wall Street men yesterday pointed
out two "jokers" in the resolutions
| calling upon members Of the Exchange
for information for the use Of the leak
committee.
The resolutions asked these ques-
tons:
"First-Of what Clearing House
stocks each customer was long, of what
Clearing House stocks he was short
at the end of the day, giving the name
of the customer, the stocks, and the
number of shares each.
"Second-What Clearing House stocks
were borrowed, when and from whom
borrowed, and when returned"
Brokers Not Customers
The first of the "jokers" seen by these
critics lay in the fact that brokers are
not called upon to give list OF the
operations for their own account or
the account of any Of their partners.
Only the accounts of customers are
asked for. II is common knowledge
that Wall Street houses often trade for
their own account and the accounts OF
their members. For example, on the
dav that Charles II. Sabn gave out his
famous peace tip one large speculative
house was credited not only with hav-
ING driven its customers TO sell stocks
thew we're long Of and some they did
not possess, but with having sold
long line of stocks for its own account.
This firm had its opportunity to 90
this because of the fact that 1T had the
Sabiu information before 1t was put on
the tickers or published IN the evening
The second "joker" is seen in the
words "at the end of the day" IN the
first question. The clause reads that
members are requested TO show what
Clearing House stocks each customer
was short of at the end of the day,
giving the name of the customer, the
stocks and the number OF shares OF
each"
Under this. il was pointed out that
any one or twenty members could nave
dealt i'm any amount OF stock without
being short or long of single share
at the end of the day. Thus a. at 10
o'clock on any day. might sell 100000
Steel short. buying 100000 in the last
-, &C .bo husinees dav and though