Evening star., 1933-10-17
EXCHANGE REFUSES
SENATE'S INQUIRY
Members Won't Answer Cues.
tionnaire, Whitney Tells
Committee Counsel.
N fne Associated Press.

NEW YORK, October 17-Richard
Whitney president of the New York
Stock Exchange, yesterday notified
Ferdinand Pecora, counsel to the Sem
ate subcommittee investigating banking
end brokerage transactions, that the
exchange will not submit to its men,
bers QUESTIONABLE asking them for
information regarding their business
transactions.
The QUESTIONABLE, prepared by Pc
cora, also asked for certain informa-
ton from the exchange itself. Whitney
said in letter to Pecora that the
exchange will furnish that information.
The questions regarding exchange mem
bers' operations covered a period Of
five years.
Whitney wrote Pecora that "as origi-
nally submitted" the QUESTIONABLE lin
many instances" would have required
the members of the exchange to have
each customers account examined and
analyzed.
Expense is Cited.
''This." Whitney said, would have
required Stupendous amount of work
and the expenditure by members of
the exchange of many millions of
Il do not believe therefore, that
lilC CASIldilSc SllOulu, III J1SIlCe W It's
members, adopt your suggestion and
impose any such huge expenditure upon
them for the sole purpose of securing
economic statistical information"
Whitney also said that some of the
questions particularly those referring
to the income of members of the eX-
change and to the number of and debt
balances in margin accounts carried by
them in 1929 and 1888, would have re-
qulred the members to furnish you with
information which they have already
given or are currently furnishing the
Department of Internal Revenue"
Called Grossly Unfair"
Whitney said it seemed grossly un-
fair" to compel members Of the ex-
change to furnish the same informa-
ton, almost duplicate in certain aspects,
to two departments of the Govern
ment"
The exchange head closed with the
statement that in refusing to send the
QUESTIONABLE the exchange was merely
adhering" to an established" precedent
and was in no way seeking or wish
ing" to delay the investigation.
With his formal reply to Pecora,
Whitney made public a letter from
Roland L. Redmond, exchange counsel,
which stated that under the trading
Dody's constitution its Governing Com
pittee has the power to secure informa-
Ctlon by QUESTIONABLE from members of
the exchange
This power has been used whenever
the Governing Committee felt it was
necessary to investigate irregular trans
actions or practices which might i'm
properly affect the market" Redmond
said.
Sent Out Before.
without attempting to record all of
the instances in which missionaries
have been sent to members of the ex-
charge in recent years, I should per-
haps remind you that it was used in
the alleged corner in Wheeling and
Lake Erie stock some years ago; in
the Manhattan electrical supply cases;
and Ter the statistics in regard to short
selling not only at the time of the panic
in 1929. but again currently since the
early part of 1881.
In each instance where the Senate
Committee represented to the exchange
that the market had bsen affected by
irregular or unfair practices this power
was invoked to secure the facts.
Il refer, of course to the special
queStionnaire sent in regard to the short
position on April g. 1892; to the in
vestigation of the trading in Kreuger
and Toll securities at the time of Ivar
KreugerS death, and to the investiga-
ton, recently concluded, of the rumors
that pool transactions in the so-called
alcohol stocks had affected the market
in the early part of this year.
No Precedent Here.
'These instances, however, furnish no
precedent for the present case The in
formation sought by the proposed ques-
tionnaire has no direct bearing on
market practices or on the conduct of
members of the exchange. On the con-
trary, it consists primarily of what
might be described as general statistics" :"
Pecora had requested Whitney to sub
NIT the questions as the "speediest and