Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-15
PRESIDENT SOUGHT
FACTS ON MARKET
Conference Here Seen for
Purpose of Getting Ex-
change Background.
BY DAVID LAWRENCE.

Although the White House is nat
urally reluctant to discuss conferences
dealing with operations on the New
York Stock Exchange, there Is no doubt
now that President Hoover wanted to
get the background Of what Is happen
ing in the securities markets when he
conferred here on Sunday with Richard
Whitney, president Of the Stock Ex-
change, and Allen L. Lindley. vice
president of the Exchange.
The whole subject Of short selling Is
one that has been disturbing officials
for some time. II first arose, of course,
in connection with the short selling OF
wheat by the Soviet government on the
Chicago grain exchange, and now that
the stock market has been yielding to
pressure by operators who are trying 70
depress the market for private gain.
Government officials are wondering
whether the practice can really be de-
Tended.
Denounced Short Selling.
Mr.. Whitney had made a speech IN
Chicago last week in which he said
that short selling was legitimate, though
he denounced the practice as improper
If it were merely for the purpose OF
manipulation OF prices.
The question that bothers ofncials
here is whether even what is consiuereo
legitimate hedging practice does not
take on the aspect Of psychological
impairment of values when 1t comes
at time Of crisis in the economic sit
uation of the country. :.
While brokers and bankers have from
time TO- time argued that short seinng
was a corrective measure and had It's
economic function, the legislative mind
has not been able to grasp the point so
readily. If Congress were In session
today there is no doubt that an investt-
CATION Of short selling in all the i'm
portant exchanges Of the country would
be fully under way, with proposals To
legislate against such practices.
Can Discipline Members.
Stock exchanges are well organized
and regulated to discipline their mem
bers, but nevertheless there has been
movement in recent years In the direc-
ton Of curbing the extremes Of such
speculation. Only in the last session OF
Congress a bill was seriously pressed 70
tax speculative transactions. 1t Is the
kind Of measure which can be rather
easily passed because most members OF
Congress have little or no knowledge OF
Stock Exchange operations and are
quite ready to accept the view held IN
smaller communities of the country TO
the effect that the New York Stock Elk
change really is only glorified gam
bling institution.
Under the circumstances, the inquir-
les made by Mr.. Hoover are In line
with a desire to determine whether the
Stock Exchange itself could not sug-
gest something which would avert a
more serious interference with its oper-
atoms.
Likewise It is understood that the
President, who has known Mr.. Whitney
| for some time because of the latter's
connection with the Food Administra-
| ton during the war, wanted to gel
| first-hand information on just what
was happening in the Stock Exchange
and what the powers Of its officers were
White House Interested.
Certainly from every point Of view
| politically and economic, the White
! House Is interested In any factor which
disturbs the morale Of the country anc
whether the business transacted by thG
stock Exchange is or Is not technically
| within the jurisdiction Of the Govern.
ment. There are many reasons why
the authorities here would wish to b.
| informed.
Reports are current that the Depart.
ment OF Justice has been trying 70 gel
| the facts, but this would not be sur
prising because when Mr.. Hoover want,
to get q comprehensive picture Of
subject he uses AL branches OF the Gov