The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-04-22
TRADER Tells
INSIDE SHORT
SELLING STORY
Matthew Brush, Operator
on Big Scale, Appears
at Senate Quiz.
SYSTEM IS DENOUNCED
Witness ASSaiIS CLOSING
Up and Closing Down in
Market Deals.
By United Press


stock markets most important
traders, today denounces the prac-
tice of CLOSING up" and closing
down" the stock market as the
greatest abuse in the manipulation
of markets.
Brush was the first genuine
bear produced as a witness at the
senate banking and currency COM
mittee stock market Investigation.
He said without hesitation that in
1929 he had a S15,0OO,OO0 long" in
tereSt in the market and in 1880
was $4,000 shares short.
But he protested that he was not
an lin and out" trader and knew
what was back of the shares he
bought and sold.
Asked what basis the public acted
upon the trading, he said it usually
was on the tip of "Heinie and Gee
goobler"-two fellows who came
over from Greece two months ago."
Layman Given Light
For the layman, it was explained
that closing up" and CLOSING
down" meant the practice of brok-
ers putting in a sale at the mo-
ment OF closing point or a frac-
ton c. point above or below the
market. The last sale of the day
represents the close, and Brush ex-
planned that:
"A man in New York will close,
perhaps Steel, up a point and a
poor fellow out in Keokuk that night
will tell his brother over a stein of
beer: Gee, look at that market go
up. Let's buy some
They buy the next morning and
the fellow who closed it up sells
it to them.
Il know of instances where a
stock closed a. point up or a point
down. I think the crime of closing
up is as great as the crime of clos
ing down, because that fools every
sucker in the United States.
Brush described himself as a
substantial trader" president of
the American International Corpor-
alton and director of about fifty
other corporations.
Started on Small Scale
what has been the extent of
your trading?" William A. Gray,
committee counsel, asked.
When I started, it was pretty
skinny trading-50 or 100 shares. 1
once had long position of approx
mately $4,000 shares"
What was the largest position
you ever assumed on the short
side?" Gray asked.
About the same"
zone hundred twenty-five thou
sand shares?" Gray asked.
eyes"
What did your greatest interest
represent in dollars and cents?"
Gray asked.
"The iquidating value of my no
Sition in August, 1929, was in the
vicinity of $15,G00,000," the witness
replied.
When stocks were climbing be-
fore the collapse, we're you ever
short?"
No Big Short Interest
Brush said he had no material
short interests at that time, but be-
gan selling short in the spring of
1880.
Brush appeared earnest and
courteous. He gave an impression
OF frankness. He is gray haired.
stocky and rudy. Beads of per-
Spiration gathered on his forehead.
After the first few minutes, when
his voice was almost inaudible. he
lost his nervousness and soon was
delivering a discussion Of market
trading methods.
There are two distinct schools
both in buying and selling stocks
Brush said.
Il don't believe in selling stock
on scale down or buying on
scale up.
If I have short position in mr.
mind, it's an investment short Dor.
ton to me.
Can Be Manipulated
Il am not trader from day II
day or during the day.
Stocks can be manipulated. LIE
US assume that the market has hi
bottom, and many men believe
has, it a man wants to get a DO
slGion, he puts in buying orders OF
q scale down.
I don't do that I rather would
lose 10 points on the turn than
carry them down.
Brush told Gray that marke,
movement Of certain pivotal stocks
affects, but docs not govern" III,
market, adding that short selling
had an effect on the market to tbs
extent that it made supply create.
than demand.
I might as well tell you" BrusI
continued" am going to get she
when I get back to New York, any
way"
Supports Testimony With Chart
Brush produced a Dow-Jone
market chart to support a conten
ton that there was mo geners
rule" governing the relation of mar
ket values and aggregate short Ia
terests.
Brush talked far more freely thai
did Richard Whitney, stock ex
change president, who had testifies
for four days and revealed little. Hi
conceded to Gray that the short DO
sition statistics supplied by Whitne5
did not present the full picture O.
trading.
He charged they did not show
the in and out movement during
the day.
i never buy stock, Brush said.
that / don't know all about-the
statistics and management"
What is the basis on which the
average man buys stock?" asked
Senator Glass Dem., Val.
i wish you could leave this off
the record" Brush replied. but the