Evening star., 1934-02-24
CHARGES PR0L0NG
EXCHANGE PROBE
Fight Over propaganda"
Delays Wind-up of Stock
Market Inquiry.
BY the Associated Press.

BY the Associated Press.
A raging controversy over "propa-
gsnda" charges delayed today the
wind-up Of the Senate's two-year in
vcstigation Of the stock market.
Richard Whitney, head of New
York's big board" issued last night
a sharp denial that the exchange is
flooding the country with ''propa-
ganda" against the Fletcher -Rayburn
bill for Government control Of the
exchange.
If his efforts to defeat the measure
ere propaganda. he said. then the
constitutional right of free speech is
dead
In reply, Senate investigators point
ed to fresh testimony that the New
York Exchange spent 100000 in
less than five years for publicity pur-
poses.
The Senate Banking Committee
had intended to close its inquiry
temporarily, at least-wi,h yester-
days session. But the propaganda"
controversy spoiled that plan.
Harriss to Be Recalled.
More pages will be added on Mon
day to the 100000 words Of teSti-
mony. when George u Harriss of the
exchanges Publicity Committee re-
turns to tell more of how the million
for publicity was spent, including dis
tribution of book on short selling to
members of Congress.
Then Whitney himself will take the
stand, facing Ferdinand Pecora, in
vestigator counsel. at the formal
opening of hearings on the Fletcher
Rayburn control bill.
The House Interstate Commerce
Committee continued its hearings on
the bill today. seeking testimony from,
exchange interests other than the
New York big board" men.
1t was Chairman Fletcher of the
Senate Committee who leveled direct
charges of propaganda" at Whitney.
Whitney, in an interview. replied:
Il think the charge is untOurGed.
I summarized the provisions of the
bill and asked the presidents of COR
porations having stock listed on the
New York Stock Exchange to give the
matter their personal consideration.
Declared Duty.
"I think every citizen has the right
to call to the attention of other citi-
zens the provisions of pending legis-
lation which would affect them. In
this case 1 feel the exchange was
under a duty to do So
The New Yorker then renewed his
objections to the measure.
THE BILL" he said, although it
purports to regulate stock exchanges.
is actually cleverly devised to allow
the Federal Trade Commission to
dominate all American business and
industry. and to allow the Federal
Trade Commission to dictate the credit
policy of our banking system with
regard to security loans. which the
Glass-Steag gall bill vested in the
Federal Reserve Board"
Whitney previously had proposed
that a Semi-governmental body, rather
than the commission, control the ex-
changes.
As result of the hearings yesterday,
Senate investigators felt their case for
regulations had been strengthened
From leaders of big business they
had evidence indicating small group
of large corporations was netting
several million dollars a month at the
height OF the 1929 boom by lending
money to finance speculation.
$3.50, 100000 on Call.
Statistics disclosed that shortly be-
fore the market collapse, 20 corpora
tions had about S750, 100000 loaned
on call in New York's money market.
They indicated large proportion
of the S8,000.OO0, 900 in brokers loans,