The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-06-10
UNTERMYER SAYS MERGER
MAY BENEFIT THE PUBLIC

10 allow a public market. inviting the
public to buy a security in a company
that has not been organized, the amoun'
OF the securities OF which have not been
stated, so that when the company is
organized the man who buys Is bound
10 take those securities. not having pre-
viously known what they were or would
be? A. That Is a matter OF the Judgment
OF the committee. / do not care 10 ex-
press an opinion.
s.Not Necessarily" Gambling.
Q. But you ought to. Don't you think
scionable form of gambling? A. Not
necessarily.
Q. But il may be? A. 1t might be.
Q. Well, now. take this particular
cas-. You have heard Mr.. Schiff tes-
tfy that this whole plansis subject to
any kind of change? A. Yes, sir.
Q. You heard him testify that the
bankers were not committed to any
thing. haven't you? A. Yes.
@. That the company might. or might
not be formed? A. Yes.
@. And that it might be formed with
entirely different kind of securities? A.
Yes.
Q Don't you know that II 1t is formed
at all, when the stock is issued. deliver
able when issued. that the purchasing
broker has got to take the stock? A.
But II the plan is changed the contracts
may be declared null and void.
Q. Where did you get that Idea from
A. That is for the committee to decide
later on.
Q. Can you see anywhere the public
when and as issued.
Q. They are trading in blind pool ?
A. They may be-
Q. You don't take any chance. do you?
The public takes the chances. A. Yes.
Making n Market for Stocks.
The broker Altmayer, who was the
first to disclose Kuhn, Loeb & Co. s
connection with the market activity last
Friday in North American Steel also
contributed some observations regarding
the curb market. After testifying that
his orders TO buy came from Kuhn, Loeb
& Co. over a private telephone he told
how trading started following the post
ing of a notice.
/, Q. What did II say? A. Trading will
start at l o'clock in North American
Steel. ] think it was about an hour be-
fore. 1t was, anyway, half hour be-
fore.
Q. And then there was a great crowd
there. and nobody knew anything about
what the stock was. did they? A.
guess not.
@. And then they started bidding
wildly on this stock, back and FORTH did
they? A. Yes. sir
q. You know how a market is made
In new stock? A. Partly.
Q. You know 1t is made by giving out
buying orders to one set OF brokers and
selling orders to another? That Is the
way you start market In new secu-
rity? A.. AS rule.
@. And then the man who holds the
bag and has the stock. he manages to
sell some In between? A. Sometimes.
Q. That is a purely speculative thing.
going into when issued" proposition.
isn't 1t? \. Yes, sir.
Q. Don't you think it ought to be pro-
hibited entirely? A. 1t is very hard to
do that.
q. Do you think the bankers ought to
help II along? A. 1t Is for them to de-
eide. 1t is too deep for me.
Early in the session Mr.. Jntermyer
announced that Mr. Chadbourne had
supplied him with the figures and infor-
! nation which he had withheld previously
and had thus Cancelled the contempt
charge. The figures were not made pub
lie.
The committee adjourned to meet next
Thursday morning.