Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-19
STOCK DROP PROBE
BY CONGRESS SEEN
House Members Said to.
Favor Study of Opera
tors Work.
BY FREDERIC WILLIAM VILE.

Current events on the New York
Stock Exchange have led to serious con-
sideration of a congressional investiga-
ton of the conditions which brought
them about. Responsible leaders in
both Houses are privately discussing the
is decided upon the probability is that
the House of Representatives will con-
duct it.. The Senate, with a mass of
important unfinished business and the
special naval treaty session just ahead,
would not have time for a thorough
going probe at the moment.
Members OF Congress who believe it
is timely and justif1able to turn the
Federal searChlight on periodical Wall
Street crises" think the present crash
an ideal one for that purpose. They
are convinced it is a typically manipu-
lated crisis. They feel, in particular,
that the new tariff law has been trot-
ted out as an alibi to cover up the real
motives and objects of the big-tiYne
operators who pull the strings on these
occasions. One of the special matters
into which it is thought Congress might
dig with profit is the alleged dumping
of huge blocks Of foreign-held American
securities into the market this week.
There are suggestions that New York
financial interests. which are known to
be violently hostile to the Hawley-
Smoot legislation, may have brought
about these foreign operations as one
means of venting their anti-tariff
spleen, regardless of how many might
be hurt by them.
May Expose squeezing Out"
The short selling" maneuvers which
are an almost invariable feature of Wall
Street upheaVals would be scrutinized
with special thoroughness, if g. con-
greSsional probe should be undertaken.
Members are confident that the country
would receive a useful object lesson in
the art of squeezing out" the small
spectators, notably margin buyers,
whenever it suits the convenience of
Sional leader, who favors the inquiry,
has information that at the zenith of
last years crash no fewer than 18,000,-
coo persons in the market out of a
grand total of 100000 900 were margin
SPECTATORS. Broadly speaking, the
100000 were wiped out for the more
or less direct benefit and profit of the
100000 others.
Hoover administration supporters on
SdDlIO1 I1lIl are COINAlCGu
that resentment toward the President,
along with dislike of the tariff, is large
ly at the bottom of the recurring dis
turbances on the Stock Exchange. ANY,
body who has been in New York dur
ing the past few months and had con-
tact with lower Manhattan Island is
aware of the blind and unreasoning
hatred which now prevails toward the
administration. The President himself
comes in for the lions share of the
TRADES one hears from people whose in
terestS are identified with Wall Street.
Hoover is blamed for everything that
has gone wrong in the market since the
slump movement set in last Fall. His
critics cannot tell you definitely Just
why the President is responsible, or
what he could have done to avert
crashes, but they are certain he is to
blame, just the same. They'll assure
you that if the Californian were run
ming for President again this week, he
couldn't carry a ward in the State
of New York"
Think Operators Launch Drives.
A congressional investigation, such as
the one now being talked about, would
aim at finding out, as far as possible,
to just what degree this anti-Hoover
mania In Wall Street is back of the
manipulation movement. An impress
sion exists in Washington that, disas-
trous as these organized bear drives are
even to the big fellows, the latter
would not shrink from launching them,
if only they would serve the purpose
of seeming to fasten more blame on
the national administration.
To expose the artificiality, as many
members of Congress view it, of these
recurring smashes in securities is the
basic object which an inquiry would
have In mind. There are some who are
persuaded that the mere institution of
such an investigation would be of i'm
mediate, far-reaching and wholesome
effect.
(Copyright, 1900