The New York herald., 1922-06-04

4 Il
"One moment, you do not regard tina
as pool manipulation. do you?"
II do not know what you mean by poo
manipulation, II that is what you cal
pool mS-.pniation, because you kno-
perfectly we'll II is not"
"Or for the purpose OF marketing
large blocks OF stock?''
There is no manipulation whatso
ever
you know how large blocks OF stock.
are marketed by syndicates. do yo,
note"
II do"
Relies on His Firms Record.
"They are marketed through a broker
OF a banking house or series OF bro
kers buying and selling stock until they
have exhausted the syndicate dealingi
or until the syndicate has expired. and
they distribute what stock has re-
mained"
| That is not our experience"
What is your experience?
"Our experience is that the public
| rightly or wrongly, has apparently con-
| sidera BILE confidence in our record anc
our knowledge and our judgment. anc
that II we buy something. be 1t bonds OF
be II shares. and put price upon It, the
public as rule is ready TO buy II be-
cause they think they are making 9
wise purchase"
"That has been the reputation OF your
house.
Yes"
Nobody is questioning the reputation
Of your house?"
You apparently are"
"You are mistaken. / am trying tc
get the facts. / ask you whether this
was or was not the method
You made the statement--
"I don't care to have any controversy
or discussion with you. Mr.. Schim l
would like you to answer my question.
But would like to say to you that no.
body Is questioning either the integrity
or the standing of your firm. We are
questioning methods prevailing methods
Of disposing of security. In order that
the syndicate shall come out even II has
got to get on the figures you have fixed
here at least s43 share for this COM
mon stock?'
Assuming they get substantially 80
for the preferred.'
"syndicate Gets Extra Profit"
"And then when the profits are ascer-
tained over and above $43 per share for
this stock, how much OF that goes to the
syndicate; everything over 1852"
and Is per cent. to ourselves for manag-
ing It,"
by managing the syndicate, you mean
marketing the stock in the way you have
described, do you?"
"Yes"
THAT is your present impression"
"In q general way 4 should say that
would be the result" !
And any profits that are realized on
trading in the stock: that Is. buying 1t
at one price and selling It at another.
that becomes part Of the syndicate
profit?'
"All goes into the syndicate"
"Does No Trading Business.'
II ask you how many shares you ex-
pect to tradein. to buy and sell back
and forth, in order to market 505.00O
shares?"
ct do not trade back and FORTH
How many shares do you expect to
have to trade in?"
IT have no idea"
"You cannot te1l?"
"It depends upon the market"
ut depends upon the avidity OF the
investor?"
'It depends upon the number OF ex-
listing shareholders of the three COM
panleS involved VINO may WdHt IL cash
in on their investment"
"It also depends upon how much of
the stock you have to sell, the public Is
willing to take?"
ITO certain extent"
you know, do you not, that this stock
was dealt In yesterday on the Curb, when
issued?"
Yes"
do you know what brokers traded ir
that stock yesterday on the Curb"
II don't know"
These transactions of yours will be
on the Curb won't theyT t
mot necessarily: they will probably
be on the Stock Exchange"
Don't you know that this stock Is
going to be traded in before the stock
can be listed on the Stock Exchange?"
"No, the stock will probably be issued
on a when Issued basis on the Stock
Exchange at the time we form our syn
| dicate."
You expect to Issue it then. that will
be within how long?"
within a week or two"
And within that time you expect "a
have all the statements that are neces-
sar-y for the listing on the Stock Ex-
changer
FOR the listing when issued"
"You have 10 give all the particulars p
No: they do not require very full
statement for issue on the when Issued
basis"
Refuses to Name Combinations.
Mr.. Untermyer explained to the wit
ness again the committee interest In
the proposed mergers as affecting hous.
ing and the structural steel market and
endeavored 70 draw from him the
names of other companies that may
be under consideration by the bankers
in possible combinations. Mr.. Schiff re-
fused to name them on the ground that
the discussions were in such state
that they might never be taken NJ
seriously.
Mr.. Untermyer did not press this line
OF inquiry, but Mr.. Schiffs resentment
OF the questions began to rise from
this point Mr.. Untermyer asked:
Now in addition to this 10 per cent.
Mr.. Schiff. that you are to get from
any profits of the syndicate In connec'
tion with the marketing OF this stock
I understood you to say you were tc
get $500 shares of the stock"
AT $40 a share"
What are you going to do for it?'
I'VE are taking the responsibility
toward the public OF fathering finan-
cially this concern. We propose to take
a continuing interest in IL the way we
do with other large corporations with
which we are connected"
You mean you get this $4,000. 900, oi
whatever more you may get out OF ths
stock. for the moral responsibility thai
your Arm assumes In fathering this n.
the bankers for the new company. Il