The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-12-20
STOCK MARKET
SCIENCE IS NOT
QUITE PERFECT
Is Still to Be Made Exact,
u. S. Securities Com
mission Finds.

By Scripps-HoUdrd Newspaper Alliance
WASHINGTON, Dec. 20.-Despite
the slaughter Of the lambs in the
1929 market crash, people of appar-
emily sound business sense on other
matters still buy stocks on a hunch-
and-tip system that smacks of the
superstititions of stump water and
the left hind foot of a rabbit.
The Securities and Exchange
Commission trial of Michael j.
Meehan, the New York Spectator,
has revealed that the so-called in
siders and men who have played
the market for years buy and sell
with less reason than they require
for laying a bet on a horse.
SEC lawyers have showed, through
a series of witnesses, how the ran
dom tip" is started, how it speeds
by word of mouth, and how men
buy on the basis of a rumor which
has little to do with the funda-
mental business and earning power
OF the corporation whose stock is
peHlB BODDleQ up,
The SEC has charged that Nee
han organized a tip system to push
up Bellanca Aircraft stock, and that
other persons were involved in the
operation, either innocently or
knowingly, but the inquiry has gone
far afield to show that men here
and there, we'll known in business,
need only tip to take flier.
And Here's the System
How closely related are horse
race betting and stock market gam
bling, even today, was exemplified
in one witness who appeared be-
fore the commission, Mathew Frank,
a bookmaker, who does a little
liquor" and a little real estate"
business on the side.
Here's his system of stock buying
as related to the SEC:
when 1 hear something I lust
go to it and get it over with. Who
knows how I buy stock? I don't
+, know myself. l realize it's a tough
answer If I have a bad day I 90
anything"
He said he bought Bellanca stock
because he heard Meehan tell a
friend over the phone that the
trader was putting money into Bel
lanca. Over and over this story is
repeated until you can almost Wis
ualize Dame Rumor buzzing about
in Wall Street and La Salle-st:
"Meehan is negotiating. Meehan
is putting up his dough Meehan
is getting into Bellanca."
James F. McConnichie, president
of Good Humor Ice Cream Co., a
successful Moenan enterprise, said
he had recommended Bellanca stock
to numerous people partly because
Clarence Chamberlin flew to Eu-
rope after Lindbergh in a Bellanca
plane and because he heard Nee
han was refinancing the company
Not a Question Asked
He knew nothing about the re-
ported refinancing, nor about the
company, and was told at the hear
ing that Bellanca had suffered
heavy losses in all but one year
1888. when it Showed a profit of
$4,000 since its organization in
1923. He spoke vaguely of export
figures on airplanes, of congressional
appropriations for aircraft, but knew
nothing of what Bellanca might get
out of this.
And then he admitted he had OBJ
tanned Bellanca catalog 10 days
before he appeared here to look up
something about the business. SEC
lawyers said this was to enable him
: to show some familiarity with the
company when he testified.
This ignorance is duplicated In
numerous other cases.
There was, for instance, Stewart
Sperry of the firm of DeVoe, Dyke
& Sperry who advised couple of
persons to buy because he knew that
Meehan had visited the Bellanca
aircraft factory and he knew that
Meehan was negotiating for Bel
lanca stock. He admitted he knew
no details Of Meehan's negotiations
and nothing whatever about the
companys condition.
And the two bought, asking no
further questions. One was an
electrical wire manufacturer, the
other member of a stock exchange
firm.