Evening star., 1932-04-26
La GUARD|A HOLDS
FINANCE WRITER'S
WERE SUBSIDIZED
Appears as Surprise Witness
to Charge Newspaper Men
Were Paid by Brokers.
BRINGS z TRUNKS FULL
OF DOCUMENTS TO PROBE
New Yorker Says Exchange Mem
bers Circulated Misleading In
formation on Issues.
By the Associated Press.

By the Associated Press.
The use of publicity to misrepresent
stocks in drives by brokerage pools to
initiate their values was charged before
the Senate Banking Committee today
by Representative La Guardia of New
York.
The fiery independent Republican
produced from two trunks numerous
checks he said had been paid to some
writer's of financial topics for New York
and other newspapers to "ballyhoo"
certain stocks. He also brought litera-
ture he said had been circulated, fore
casting bull markets.
Says Whitney Knew.
La Guardia said Richard Whitney
president of the Stock Exchange, knew
of market irregularities. In referring
to one -Kreuger-which he said
was handled by Lee Higginson & Co.
La Guardia said:
why, Senators, If Whitney had been
president of a grocery exchange and
Higginson was selling canned beans and
conspired to misrepreSent as they have
in their present occupation, both would
be under indictment at this time"
He said A. Newton Plummer, pub
licity counsel, had paid out $286,000 to
financial writer's for publicity and that
he had checks to show where $l7l 600
of the amount was paid. He named
several financial writers to whom he
said money was paid.
Plummer was employed in one case,
La Guardia said, by the Chase Securi-
AsA~ Nryt1s sah t1n
afiliated with the Chase National
Bank.
Police Guarded Trunks.
Accompanied by two assistants, La
Guardia brought into the committee
room the trunks which he had placed in
a police station last week for Safekeep-
ing. Chairman Norbecks promise of a
big surprise" today brought another
big crowd
Just before calling the committee to
order Norbeck went over to whisper
something in La Guardia's ear. Then,
rapping for order, Norbeck said some
important papers had fallen into La
Guardia's hands.
Senator Barkley Democrat, Ken
tucky) asked If any one had examined
the papers to see II they were proper
evidence. Norbeck said he had ex-
amined them briefly.
La Guardia began by saying he had
"started looking into the matter Of
stock exchanges several months ago"
as member of a House committee
studying the subject.
Cites Previous Testimony.
He spoke in tone so low that Sen
ator Couzens Republican, Michigan)
asked that he raise his voice.
Speaking more loudly and with en-
phasis. La Guardia told the committee
1t had Been stated by a responsible
official of the New York Stock Ex
change" before a committee that the
exchange and its membership ARE such
that they have absolutely nothing to
do with the promotion Of stocks, the
ballyhooing of stocks"
His voice rising, the witness asserted
that "any such statement is deliberate
" false" He added that "misstate-
ments are profitable"
"Misstatenents. he said, may send
the market up or down"
On March 3, La Guardia said, Horn
blower & Weeks, a New York broker
age house, sent out a circular to its
customers predicting a bull market and
saving it had already begun to appear.
The circular urged Immediate pur-
chase of sound securities"
Meantime" La Guardia said, there
was no such bull market Such an op-
timistic prophecy was not justified"
Blamed La Guardia Resolution.
"The same firm on April sent out a
statement blaming the market decline
on the La Guardia resolution to tax
transfer of securities. OF course, there
was no such resolution"
La Guardia said the tax on security
transfers was an amendment to the tax
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