Evening star., 1938-12-18
Whitney Row Blamed
As Hutthins Quits
Exchange Post
Public Governor Wanted
Further Action Taken
In Scandal
BY the Associated Press.


NEW YORK, Dec. 17.-Robert M.
Hutchins, president of the Univer-
sity of Chicago, resigned today as
public" governor Of the New
York Stock Exchange after the gov
erning board had voted against re-
opening the Richard Whitney case
for further investigation.
Mr.. Hutchins, one of three public
representative among the 80 gov
ernors, parted company with the
new liberalized regime In a differ
ence of opinion over the question of
determining responsibility Of ex-
change members who may have
known of the conditions that led
to the collapse of the Whitney firm
last March.
In a report on It's investigation
into the affairs of the man who
was five times president of the ex-
change, the Federal Securities and
Exchange Commission recently
charged an "unwritten code" of
silence on matters of borrowed
money in brokerage circles had en-
abled Whitney to hide his situation.
Points to Record.
In a brief letter of resignation,
made public today by the exchange,
MIR. Hutchins pointed out the S. E.
c. record contained evidence tend
ing to show that members of the
exchange or their partners knew
Of Richard Whitney's criminal con-
duct or the condition of his firm
some months before its failure"
THE public interest" his letter
added, 'the good name of the ex-
change and the good name of the
members referred to all require the
Board of Governors to institute pro-
ceedings in which the question of
the responsibility of these members
may finally be disposed Of"
Named in the S. E. C's findings
as having had knowledge of Whit
neys misdeeds some months before
they became publicly known were
two partners of j. P. Morgan & Co.
George Whitney, brother of Rich
ard, and Thomas w. Lamont.
Board Vote Is n to 1.
The Morgan firm, calling the S.
Z. c. criticism unjust" retorted at
the time that George Whitney had
done what any brother would have
under the circumstances in failing
to notify the exchange authorities.
AE- ,fcI, iv, hi -
ton after the board, in 27-to-1
vote, at its regular meeting last
Wednesday decided there was no
ground for resuming the Whitney
inquiry.
Explaining the boards action, Will
liam McChesney Martin, jr., youth
full president, asserted, There was
no necessity of duplicating the COM
plete record" gathered by the Fed
eral investigators.
He noted the two other public
representatives had sided with the
majority in the decision. They are
Gen. Robert E. Wood, president of
Sears, Roebuck & Co., Chicago, and
Carle G. Conway. head of the Con-
tinental Can Co., New York.
Widening of Prices.
In the first board meeting at
tended by Mr.. Hutchins few weeks
ago. following his appointment, the
governors approved the widening of
the exchanges disciplinary powers
to cover non-member general part
ners of stock exchange firms as well
1,1 IL
but one exchange membership and
under the old rules only the part
ner owning the seat could be discip-
lined.
The Morgan house holds an ex-
change membership.
The rift brought into the limelight
two personalities who became heads
Of great institutions at an age when
most men are just getting out of
their apprenticeship in life. Mr.
Hutchins was 80 when he became
president of Chicago University in
1929.
At the age of 81, Mr.. Martin last
summer became the first paid presi-
dent OF the exchange, after the lib
eral forces had gained control, to
advance a program of closer CO.
operation with Federal authorities
The victory of the Martin wing
1t appeared, was helped by the
Whitney scandal, involving the, rec
ognized leader of the "old guard
for 1t broke in midst of the cam
paign for reform of the admins
tration.