The New York herald., 1922-06-12
TELLS CURB TO HALT
STEEL MERGER DEALS
Untermyer Threatens to Seek
Indictments if the Mar
ket Doesn't Obey.
SEES 1T A BLIND GAMBLE
Selling Stock sWhen Issued,
Carries 1t Beyond Law,
He Warns.
SEES 1T A BLIND GAMBLE

Samuel Untermyer, counsel to the
Lockwood housing committee, yester-
day sent a letter to the New York
Curb Market Association demanding
tEat trading In the stock of the North
American Steel Company on a when
issued" basis shall cease until the full
terms of the merger of the Midvale,
Republic and Inland Steel companies
are made public.
MIR. Untermyer stresses particularly
the testimony of Mortimer L. ScLiff of
the banking firm of Kuhn, Loeb & Co..
managers of the syndicate handling
the merger, who said that his firm
recognized no obligation. moral or
financial. in connection with the un-
dertaking despite the fact that its
name has been advertised as bankers
for the plan.
Mr.. Schiff testified also last Thursday
that he had no knowledge of how his
firm proposed to market the sos, 900
shares of the new stock taken by the
syndicate. but on Friday Mortimer Alt
mayer, a curb broker. testified that he
had orders from Kuhn. Loeb G. Co. to
buy 10000 shares of the new stock at
so soon after trading began.
Creating Market
Emil Mosbacher, another curb broker,
told of going more than 5000 shares
short in the stock. This testimony was
regarded by the committee as proof of its
contention that an effort was to be made
by the syndicate to create an active
market for the stock in advance of its
actual issue. NJ. Untermyer's letter to
the curb market says:
Unless the gambling operations now
being conducted on your exchange in the
non-existent stock of the North Amer
ican Steel Company when issued cease
instantly by the withdrawal of the priv
ilege of trading, the facts will be forth
with placed before the Grand Jury that
is now in session for the purpose OF
dealing with cases arising out of the in
vestigation of the Lockwood committee
and an indictment will be aked of all
concerned.
"rhe partner In the banking firm hav-
ing in charge the negotiations for the
furnishing of the capital that will he
necessary to the consummation of tho
~
has. as you know. testified that no COM
pany has yet been organized. that not
even the amount OF authorized share
capital has been determined. that there
is no agreement In existence for the fur
nishing OF capital and that his firm ls
under no legal OF moral obligation In
that respect or In any other direction
connected with the flotation OF the pro-
posed company He has also specifically
repudlated under oath all connection
with or knowledge of the pretended trad
ing o. transactions that are being con-
Quoted on your exchange or that any OF
these orders ernanated from his firm.
whether or not his testimony that
his firm has no knowledge OF or connec-
ton with any Of these dealings be ac-
curate Is immaterial. believe this
merger 20 be a legitimate undertaking.
but II Il carnot be consummated upon
It's own merits without the aid OF such
practices the sooner II Is abandoned the
better.
The Chips I'm the Game.
The fact remains that your exchange
admitted the phantom stock OF this em-
bryo company TO the privileges Of trad
ing when issued without having re-
ceivod a responsible application for list
ing, or any facts on which q Judgment
could be based and without yourselves
having or, being able TO furnish the
slightest reliable Information 10 the pub
lie Of the size, color or conversion
value OF the chips that we're 10 be used
In the game in which you invited them
and your own members 10 participate
Unfortunately, not many rules have yet
been prescribed for the game but this
happens to be violation OF the law
that IL being permitted TO be played.
thanks to the non-action OF Congress
and Of our state Legislature. which
share the responsibility OF allowing II
10 be played at all. Until the game,
az now being played. Is stopped by con-
structive legislation that will convert
your exchange from gambling hall
into the great security market that II
should be and will be when placed un-
Continued on Page Five.