Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-25
Special Dispatch 10 The star.

Special Dispatch to The Star.
NEW YORK, October 25-The New
York Stock Exchange has begun an in
vestigation to determine whether a bear
raid was responsible for selling of key
stocks in the Van Sweringen railroad
structure, it was learned yesterday.
The heavy liquidation of these stocks,
it was reported in the Street, was part
of plan to depress the whole railroad
group. Meanwhile, there was circulated
reports that one large bear operator
had been trapped in an attack on the
stock Of one Of the Van Sweringen
railroads. These were accompanied by
sharp recoveries in all Van Sweringen
stocks and bonds.
Inquiry at the Stock Exchange in re-
spect to the investigation OF the selling
Of Van Sweringen stocks was met with
the reply that no QUESTIONABLE on the
subject had been issued. Stock Ex-
change Investigations become public
only when these questionnatres are is
sued, but the Committee on Business
Conduct may make Investigations with
out the circulation Of these documents.
It was learned that an examination OF
the books of some members Of the ex-
change had been begun, but had not
as yet disclosed the nature of the SELL
ing to the satisfaction Of the committee.
Report Of Short Selling.
Wall Street gossip linked the names
Of several bear operators 10 the decline
in the Van Sweringen stocks. One story
was that an operator who made for
tune by short selling in the break OF
the market last october had sold on
Thursday most Of the $4,000 shares OF
Erie Railroad stock that changed hands
on that day. When he endeavored to
obtain actual stock for delivery on the
sold so ZOO Erie shares to banking in
tereSts that have been associated with
the Van Sweringens and that 1t was TO
them that he would have to turn to OBJ
tain actual stock for delivery yesterday
in accordance with Stock Exchange reg
| uiations.
After some negotiation; according to
! the report. the banking house agreed
| to lend him the stock at a premium OF
one-eighth. This had the effect of CIV
| ing him until today to cover his sales.
Erie stock advanced 3ss points yester-
day.
The Van Sweringens control their
railroads through a series OF holding
| companies, forming what Is sometimes
described as q pyramid The general
decline Of all railroad stocks recently
caused conjecture as to the cumulative
effect on the series Of Van Sweringen
holding companies. Under the inden-
! lures Of two of these holding companies
the Van Sweringens were obliged to
post fresh amounts of marketable Sc
curities to compensate for declines In
the value of collateral resulting from
stock market depreciation, and as re-
suit Of the sharp declines the question
was raised as to whether the Van Swer-
ingen resources had been taxed to meet
these conditions.
Lineup Of Companies.
Inquiry yesterday failed to disclose
any sign that the Van Sweringeni
had sought aid from any outside sourc,
In order to maintain the collateral re.
quirements of their holding companies
Neither o. p. nor M. ]. Van Swer.
ingen was in the financial district OF
Thursday, when their stocks were de
clining, or yesterday, when they wer'
recovering. o. p. Van Sweringen ad
dressed q meeting Of the New Englan,
Governors Committee In Boston OF
) Thursday and M. j. Van Sweringer
| while Ia New York, spent his time n
town. Both men were n ClevelA1