| Show I I I STOCK LOSS TOTALED AT SIX BILLION N. N Y Market Head Tells Senate Senate Senate Sen Sen- ate Body Value Shrinkage Shrinkage Shrinkage Shrink Shrink- age Is Enormous 4 DEPLORES HUE AND CRY Probe of Short Selling Recessed Recessed Recessed Re Re- Until Next Week By Lii Associated Press Pres WASHINGTON April 12 Shrink 12 Shrink Shrinkage age in stock values during the pa past t two or three weeks was estimated at toda today by Richard Whitney Whitney Whitney Whit Whit- ney president of or the New York stock exchange I Whitney made his his- estimate al at the theof conclusion of his second day of testimony testimony testimony mony in the senate banking comm committees committee's committees committee's commit commit- t- t tees tee's investigation of short selling I The inquiry was recessed until next Monday when the names of or short I dealers will be presented b by the stock exchange head With anther another huge crowd on hand i the exchange head again defended practices on the market I He protested against this hue and cry perhaps helped by the gentlemen of or the press in regard to loaning customers customers' customers customers' custo custo- us' us mers' mers stocks that has been in vogue throughout the country for the last I two or three years Senator Couzens CR R. R Mich re remarked remarked remarked re- re marked that any man who signed the customers agreement which Whitney produced must have been a goat 1 I In response to questions from Couzens Couzens Couzens Couz Couz- ens Whitney said the minimum margin marfin margin mar mar- gin fin indicated as good business b by the I New York stock Is 25 per percent cent margin I Do they ever go lower than 25 per cent asked Couzens J JI Not if we know it it sir I Absolutely Couzens inquired Yes sir said Whitney DELAY APPROVED A motion by Couzens to postpone further investigation after tHer today Until until un un- til Monday in order to allow time to consider the Glass bank bill was apI ap ap- ap- ap I proved I Whitney continued his testimony after the motion was carried With marginal accounts being discussed discussed discussed dis dis- cussed Whitney said the agreement in use on the exchange under which a customer agrees to let the broker loan his stock for short sales is perfectly perfectly per per- comprehensible and any customer customer customer custo custo- mer who could not understand it must be a fool tooL Arent the majority of ot those who deal on the exchange fools asked Chairman Norbeck CR R R. S. S D. D No sir returned Whitney They lost their money didn't they inquired Norbeck If the majority of them weren't fools remarked Senator Glass D. D Va there wouldn't be so much disaster disaster disaster dis dis- aster on the stock exchange Glass asked if it the market was not encouraged b by statements from rom Washington that the stock market was not beyond reasonable limits back in 1929 1029 I dont don't remember Whitney re replied re- re plied NEW ERA STATEMENT statements issued that we had reached a new era Senator Brookhart CR R. R Iowa asked I think so That is what the stock market en encouraged encouraged encouraged en- en That is not so I do not grant that the exchange was advocating that a anew anew anew new era was reached The exchange promoted inflation and that was intentional wasn't it Brookhart asked It was not Whitney said Officials Officials Off i m daIs were extremely fearful of what was going on The business conduct committee sat three four our or five times a week He c agreed that the exchange officials officials officials liked to have an active market The new restrictions on loaning stock which went int into effect April 1 had increased rather than decreased the supply of stock for loans the ex exchange exchange exchange ex- ex change executive said and the new rule has shown no effect on the amount of short selling It never was intended to have an any effect on short selling he added QUESTIONED ON AGREEMENTS AGREE Senator Couzens R. R Mich questioned ques ques- Whitney about agreements between between be be- tween customers and brokers regard regard- lag ing the loan of stock I understand Couzens said It n is quite possible for a broker to use a customers customer's stock to depress the price of the customers' customers stocks I deny that Whitney said Den Deny what Couzens asked That a broker may use a customers customer's customers customer's customers customer's custo custo- mers mer's stock to depress the market That is ab absolutely a violation of our rules How do you prevent It when it happens C Continued ln d o on Page Pace aEe Three I TOCK STOCK lOSS LOSSa a r TOTALED AT 41 SIX BILLION Continued on Pate T Two o When it happens returned Whit- Whit nc noy oy I Oh yes yes Couzens said there is isto isio to innocent it H no io reason for being so does happen J I Whitney said the last time he heard of ot it happening was in 1920 or 1921 when E. E W W. Wagner Co of Chicago Chicago Chicago Chi Chi- cago was expelled from the exchange for an action which he said was was nothing Je less than a n bucket shop oper oper- ration I Since then Couz Couzens n said mid you you have e a been able to obscure all such operations operations J I I 1 dont don't think they have ha taken place Whitney rejoined |
