Evening star., 1932-08-25
WHITNEY ASSA|LS
SENATE TESTIMONY
Report to Exchange Govern
ors Holds Probe Facts
Were Misleading.
BY the Associated Press.


filed a report with the governors of
the exchange.
Whitney, the exchanges president,
said he had not been permitted to re-
appear before the Senate committee to
reply to claims and disclosures made in
the testimony, and that he was there
fore, in fairness to the members Of the
exchange, making a final report to the
governing board.
Pointing to "flisstatements contained
in the record of the investigation"
Whitney said he did not wish to appear
to be too critical. He said the exchange
had been endeavoring for years 10 cor
rect abuses of trading. and In its list
stances been IN advance Of public
opinion"
Welcomed Full Publicity.
1--WE welcomed full publicity" he
said in regard to the investigation, "be-
cause we were confident that If the real
facts were understood and the problems
which confronted us were appreciated,
the public would realize that the ex-
change, by maintaining In spite of all
obstacles. a free and open market for
the Nation"
The spokesman for the Stock Ex-
change condemned certain abuses OF
power by some individuals, but insisted
that the Stock Exchange had been and
now is moving to improve practices as
rapidly as Is practicable. Highlights in
his report, which fills 80 pages of print
ed script and about an equally Volumi-
nous record Of charts and graphs, fol-
low:
He condemned one of the abuses dis
closed at the hearing which showed that
money had been paid to employees of the
press by persons who we're either spec
ulating in or distributing securities"
But much of the testimony submitted
on this point, he said had been mis-
leading and. he added. Il know that
the owners and publishers of our news
papers and all responsible representa-
tives of the press will join with the ex-
change in taking whatever action Is
necessary to stamp out practices OF this
kind"
Short selling, he insisted, had made
it possible to keep the stock market
functioning throughout the depression.
Defends Short Selling.
Had we banned short selling in 1880
or 1881, or 1882, as we were urged to
do" he emphasized. I'VE would not
have had the necessary buying power to
help us through what seems now to
have been the last stages of the great
depression"
Whitney again drew a distinction,
which he said is now coming to be
more generally understood, between a
normal short sale made by a person
who believes that securities are over
valued and bear raid which is the
L. 0f tr a ra1rvI-
lated to force q decline in prices"
The Senate investigation, he said,
had apparently been prompted by re-
port that foreign influences were con-
spring to force the United States off
the gold standard by gigantic raid on
the stock market" Presumably this
was TO be financed with resources ag-
gregating $1,000, 100000, and was to
strike at the stock market as of last
April g. Nothing, he said, was brought
forward to substantiate the rumor.
Scouts Bear Raid Fears.
"The Senate committee, with It's
sweeping power of investigation and
with its right, which was freely exer-
cised, to subpoena persons who had
short interests and to question them
not only as to their motives but also as
other short sellers, investigated bear
raiding to the very fullest extent. The
result furnished conclusive proof that
the stock market was not depressed by
deliberate bear raids"
On the subject of pools and pool
manipulation, he stated that list Of
market prices furnished to the COM
mittee on one pool stock varied as much
as 5 points from the prices which
actually prevailed in the market. This
stock was Radio Corporation, in which
the pool was said to have made profit
of nearly $5.oOo,0o0.
The tabulation of figures furnished
| to the Senate committee on this par
ticular stock were from March to and
| including March %, 1929.
1T was unfortunate that the tabula-
ton of prices furnished the Senate
Committee stopped on March 23," said
| Whitney because the committee was
| left with the impression that the pool
activities had increased the price of
Radio from below 80 up to 109 and a
| fraction and that the price had then
dropped back to around 81. If counsel
for the committee had gone on with
the list of prices he would have shown
| that the high price on March 25, after
the closing OF the pool, was 91k, on
March 26, 95; on March 81, 1902, and
on March %, l09, or within three-quar-
ters of a point of the highest price
reached at any time during the Radio
pool"
Went High Again.
1.-THE real facts are" the exchange
official insisted, that after the pool
ceased operation the price of Radio
went almost Immediately to 1o9. It
thereupon sold at 100 or more on 18
trading days during the month Of April,
on 10 days during the month of May,
on one day during the month Of August
and on is days during the month of
| September"
Whitney cited the pool operations in
General Asphalt stock and Anaconda
Copper.
THE Senate record does not show the
loss suffered by this pool" he continued,
referring to the General Asphalt ven-
| ture, but our accountants report that
down to May, 1881, the pool lost s4,-
| 564 900"
If they held their stock after that
date, he said, their loss was still greater.
While he observed that one pool in
Anaconda made profit of SI,225, 900,
he likewise noted that later pool in
the same stock lost more than
S6 ,391 900.
Even if we deduct the profit made
| by the first pool, the loss on the two
transactions is substantially larger than
the profit made in the Radio pool" ne
stated.
Hits Brookhart Figures.
Whitney said that the Senate Com
rnittee's counsel appeared to believe
that a specialist had full knowledge
of all the buying and selling orders
in a particular stock and therefore
was in position to trade for his own
advantage with perfect safety" adding
, that this, Of course, is not true"
He assailed the accuracy Of figures
used by Senator Brookhart who asked
what possible reason there might be
for the great appreciation In value OF
shares in the United Corporation. Sen
ator Rrookhart Whitney said had