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About The Augusta daily herald. (Augusta, Ga.) 1908-1914 | View Entire Issue (June 17, 1909)
THE AUGUSTA DAILY HERALD Vo£uME XIV., No. 168. COMMITTEE GIVES RESULT OF SPECULATION PROBING Says Mercantile and Metal Exohauge Do Actual Harm and Their Chart ers Should Be Repealed. NEW YORK.—The report of the committee appointed by Governor Hughes to investigate speculation in securities and commodities and the organizations used in dealings there in was made public Wednesday night. The New York Stock, the Consoli dated Stock, the Cotton, the Produce, the Coffee, the Mercantile and ‘he Metal Exchanges and the Curb Mar ket were thoroughly investigated iind recommendations looking to improve ment of existing conditions were made at length by the committee. The most drastic finding is that af fecting the Mercantile and Metal Ex changes, as follows: “Under pres ent conditions, we are of the opinion that the Mercantile and Metal Ex changes do actual harm to producers and consumers, and that their char ters should be repealed.” SPECULATION IN GENERAL. Concerning speculation in general, the committee declares that it may be wholly legitimate, pure gambling, or something partaking of the quali ties of both, that in some form it is a necessary incident of productive operations; that it tends to steady prices and that for the merchant or manufacturer the specualtor performs a service which has the effect of in surance. “In law,” says the report, “speculation becomes gambling when the trading which it involves does not lead, and is not intended to lead, to the actual passing front hand to hand of the property that is dealt in. "The rules of all the exchanges for bid gambling as defined by this opin ion; but they make so easy a tech nical delivery of the property con tracted for, that the practical effect of much speculation, in point of form legitimate, is not greatly different from that of gambling.” The committee makes no present ment against short, selling, but de clares the tendency of such selling is to steady prices. It is recommended that the minimum margin should be 20 per cent and strong disapproval is expressed of branch brokerage offices which supply liquor and resort to other improper means to induce spec ulation. THE NEW YORK STOCK EXCHANGE. Taking up the New York Stock Ex change, the volume of transactions thereon is referred to as making it probably the most Important financial institution in the world, its “enormous business affecting the financial and credit interests of the country in so large a measure that its proper regu lation is a matter of transcendent im portance.” Patrons of the exchange are divided by the committee into five groups, namely, investors who pay for what they buy; manipulators of prices; floor traders; outside op trators having capital and expeience and “inexperienced persons who act on interested advice, ‘tips,’ advertist ments in newspapers, or circulars sent by mail, or ‘take flyers' in ab solute ignorance and with blind con fidence in their luck. Almost with out exception they eventually lose.” As to the character of the transac tions the committee declares It is un questionable that only a small part of them is of investment character; a “substantial part may be character ized as virtually gambling. Yet we are unable to see how the state could distinguish by law between proper and improper transactions, since ttiq forms and mechanisms used are identical. Rigid statutes directed against the latter would seriously in terfere with the former. The experi ence of Germany with similar legisla tion is illuminating. But the ex change, with the plenary power over members and their operations, could provide oorrectives, as we shall show. MARGIN PURCHASING DECLARED LEGITIMATE “Purchasing securities on margin is as legitimate a transaction as a purchase of any other property in which part payment is deferred. We therefore see no reason whatsoever for recommending the radical change suggested, that margin trading he pro hibited. “Insofar as losses are due to insuf ficient margins, they would be ma terially reduced If the customary per centage of margins were increased. In preference to recommending legis lation, we urge upon all brokers to discourage speculation upon small margins and upon the exchange to ust its influence, and if necessary, its power, to prevent members from so liciting and generally accepting busi ness on a less margin than 20 per cent." Pyramiding, that is the uso of pa pers profits as margin for further com mitments should be discouraged, says the commjftree. In this connection it is suggested that if brokers and the banks would make it a rule to value securities for the purpose of margin or collateral, not at the current price of the moment, but at the average price, of 3ay, the previous two or three months (provided that such average price were not higher than the pr|ce of the moment) the dangers of pyramiding would be largely pre vented . "We have bon snongly urged to advise the prohibition or limitation of short sales" says the report, “not only on the theory that it is wrong to agree to sell what one does not possess, but that such sales reduce the market price of the securities in volved. We do not think that it is wrong 'to agree to sell something that one does not now possess, but ex pects to obtain later. Slioj-t-sellers endeavor to select times when prices seem high in order to sell, and times when prices seem low in order to buy, their action in both cases serv ing to lessen advances and diminish declines of price. In other words, short-selling tends to produoe steadi ness in prices, which is an advant age to the community. No other means of restraining unwarranted marking up and down of prices has been suggested to us.” The commit tee here calls atention to the New York law of 1812 which declared void all short sales, and to the law of 1858 repealing the act of 1812 and le galizing short sales. PRICE MANPULATION. Manipulation of prices is divided by the committee- into two classes; first, that which is resorted to for the purpose of making a market for is sues of new- securities, and second that which is designed to serve mere ly speculative purposes in the en deavor to make a profit as the result of fluctuations which have been plan ned in advance. The report then says: “The first kind of manipulation has certain advantages, and when not. accompanied by ‘matched orders is unobjectionable per se. it is es sential to the organization and carry ing through of important enterprises, such as large corporations, that the organizers should tie able to raise the | money necessary io complete them. This can be done only by the sale of securities. “The second kind of manipulation mentioned is undoubtedly open to se rious criticism. It has for its object either the creation of high prices for particular stocks, in order to draw- in the public as buyers and to unload upon them the holdings of the opera tors, or to depress the prices and in duce the public to sell. There have been instances of gross and unustifl able manipulation of securities, as in the case of American Ice stock. While we have been unable to discover any complete remedy short of abolishing the Stock Exchange itself, w-e are convinced that the Exchange can pre vent the worst forms of this evil by 1 exercising its influence and authority over the members to prevent them. When continued manipulation evists it is patent to experienced observers.” “MATCHED ORDERS” ARE CONDEMNED. Severe condemnation of “matched orders’’ is expressed. “We refer” the report says, “to that class of transactions engineered by some manipulator, who sends a number of orders simultaneously to different brokers, some to buy and some to sell. Since they are legal and bind ing, we find a difficulty in suggesting a legislative remedy. But where the activities of two or more brokers in certain securities become so extreme as to indicate manipulation rather than genuine transactions, the officers of the Exchange would be remiss un less they exercised their influence and authority upon such members in a way to cause them to desist from such suspicious and undesirable activity, CORNERS IN STOCK MARKET. “The subject of comers in the stock market has engaged our atten tion. The Stock Exchange might properly adopt a rule providing that the governors shall have power to de cide when a corner exists and to fix a settlement price, so as to relieve in nocent persons from the injury or ruin which may result therefrom, she were existence of such a rule would The board of governors of the Stock Exchange should improve pres ent conditions with regard to failures of brokers, according to the commit tee. It is suggested that the books of members of the exchange should be subject to periodic examination under rules to be prescribed by the exchange. It 1b declared further that when a broker sells a customer’s se curitles for his own benefit, he should be held guilty of larceny and a sta tute to that effect is recommended. It Is set forth also that rules should be made to prevent dealing for any clerk or subordinate employee of a bank or other moneyed corporation. More stringent requirements for the listing of securities on the Stock Ex change are advocated, among them that the exchange should exact a statement showing how much of the stock of the company has been Issued for cash and also showing what com mission has been paid to the pro moters. The unlisted department, ex cept for temporary Issues, should be abolished, says the committee. It is In the unlisted department that stocks of certain companies which have not supplied all information desired by the exchange are traded In. The pas sage of a statute is advocated pro viding that in case any purchase or sale by a broker was not actual and bona tide, the customer shall recover three times the amount of the loss he sustained thereby. Preservation of the sheets of the Exchange Clear ing House for six years Is recom mended that trading on the Exchange be done on the basis of a reasonably small unit, say 100 shares of stock and that a bidder for more than 100 shares be required to accept offers in (Continued on Page 11.) AUGUSTA, GEORGIA, THURSDAY AFTERNOO N, JUNE 17, 1909. ISINS FIRE ON ENGLISH STEAMER VIRORG, Finland —A British steam er has been fired upon by Russian tor pedo boat for approaching too close to a bay on the Finnish coast where Emperor Nicholas and Emperor Wil liam are to meet. The British steamer in question is the Northburg. She was hailed and fired upon Wed nesday night off Wirolahti, on the Is lond of Btorke. The projectile from the torpedo boat pierced the steam pipe, and one member of the crew of the English vessel was wounded. IDA WYNNE WEDS. LONDON. —Ida M. Wynne, second daughter of Robert J. Wynne, the out going American consul general in London, was married here to Hugh Renald French, first lieutenant in the Seventh Dragoon Guard. The latest photographs of Countess Bcttiui di Moise and her son, who have left their New York home since the news of the duplicity of the alleged count became public. Below is a picture of the spurious Count di Moise, whose at tempt to marry an American woman in Paris was frustrated by the state de partment. MRS. GOULD DRUNK MORETHftN OTHER GUESTS ON CRUISE NEW YORK.—The taking of testi mony of servants and employes on the two Gould estates, Castle Gould at Port Washington, N. Y., and Blue Gap farm, in Virginia, was continued at the trial of the suit of Katherine Clemmons Gould for separation from her husband, Howard Gould. The defense has called In a small army of maids, stablemen, gardeners, clerks, carpenters and other employes to testify to the actions and conduct of Mrs. Gould In an effort to justify Gould in leaving his wife on account of her alleged addiction to the use of intoxicants. Andrew Prederickson, who was em ployed as night watchman at Castle Gould in 1906, testified that he saw Mrs. Gould under (he influence of liquor, in his opinion, on November 7, 1906. Edward Bechtold, who was in ! charge of the wines and liquors aboard the Gould yaucht Niagara in j December, 1905, when the Goulds were cruising with a party of friends, testified he saw Mrs. Gould intoxi i rated several times during the cruise. I “I served Mrs. Gould with brandy every night,” the witness said, “and at dinners aboard the yacht uhe drank more than any one else.” Charles T. Dodge, a carpenter, who said he worked at Castle Gould In 1902, testified he saw Mrs. Gould on one occasion when he thought she was intoxicated. Melville E. Chapman, a broker, who bad been a guest of Mr. and Mrs. j Gould on the yacht Niagara on several trips In 1905, testified that Mrs. Gould was frequently under the Influence of i intoxicants and very loud and abusive ! In her language to servants at those times. HOLDER OE JACKSON PROBABLY SPEAKER Special to Tiie Herald. ATLANTA, Ga— Hon. John L. Hold er, of Jackson, will have no opposition in his race for speaker of the next boose of representatives, and will probably be elected. It will be re- I called that Hon. J. Randolph Ander son, of Chatham, withdrew from the race In favor of Hon. Roland Ellis, representative-elect from lilbb, and now since Mr. Ellis has withdrawn, the field is left open to Mr. Holder. I Mr. Holder has served ills county In I the house for several terms. Mr. Ellis will take a prominent part in | the coming session of the legislature, i although he will not be speaker. Countess di Moise and Son COUNCIL MEETING ON PARK MATTER A special session of city council has been called at 4 o’clock Friday after noon for the purpose of considering petition from residents and property owners of the 1200 block of Broad street asking for abandonment of the plun to park that block when the new vitrified brick pavement is laid. Mayor Dunbar will strongly urge council to decline the petition. Thu purk-way idea originated with him, and he carried it through. it is not Improbable, however, that there will be a spirited light, as some members of council are understood to oppose the plan. The mayor makes a slight correc tion in the text of an Interview ac credited to him in The Herald of Wed nesday. Baid he: “In the interview referred to, you make me state that the petition from the citizens on upper Broad street was inspired by a ‘Busy-body,’ etc. What J did say was that anyone could gel ji petition and go around amongst the people and make it appear that they were going to be injured by the proposed work, and they would sign it. I desire to further say in tills in terview that 1 have never, to my re collection, been approached on tills subject by a property owner on the 1200 block. In fact, only two per sons (outside of the counciliaen) that 1 recall having ever talked with me on this subject. One was a prop erty owner on the 1300 block, Broad street, and the other I do not think owns any real estate in the city. “J do not believe that the people understand fully the situation. Wo do not propose to pul the green the entire length of the block, but to have it in two sections. At about the cen ter of the block there will be a drive way across about the width of a street. lam satisfied that the peo ple will be pleased with this lm provement, and never have it removed after it has been tried. However, should I be mistaken In my judg ment, the center of the streei car. bo paved over, by any future admin istration, and no harm done, arid ihe experiment made. Htwsvor, there will be a meeting o. council tomor row afternoon at 4 o’clock, to consid er the petition." PUMP STATION WORK IS PROGRESSING WELL Mayor Dunbar visited the new aux iliary pumping station Wednesday af ternoon, and reports that gratifying progress is being made on the work. Quicksand interrupted the upbuild of the walls for several days, but that obstacle has been overcome, and the contractors are going right ahead. LABOR FEDERATION WAGES WAR ON CHAUFFEURS Wants a Committee In- Every Community to Ex amine Automobiles To Protect Pedestrians. Special to The Herald. COLUMBUS, Ga.—The entire morn ing session of tlie Georgia Slate Fed eral ion of Labor was devoted lo of fering and acceptance of resolutions. The most Important resolution was the recommendation of an aet of the general assembly lo require licensing of stationary engineers, chauffeurs, barbers and plumbers, all of which were referred te the legislative com mittee for action. Chauffeurs were particularly attack ed, a resolution asking that a commit tee In each community composed of two machinists and one citizen make an examination of every automobile at stated intervals, was introduced for specific purpose of safeguarding pedestrians. A strong sentiment exists for the creation of the depart merit of labor and Industry ami It is probable that bucli a resolution will be passed. President B. Leo Smith, of Atlanta, who addressed the convention last night, has been 111 during the entire day and unable to atlend the con vention sessions. ' The program for tonight Includes prominent local speakers and the at tendance will be large. Delegates continue to arrive. More than a him, dred are now In attendance. THE WEATHER Forecast for Augusta and Vicinity: Showers tonight or Friday. For South Carolina: Showers to night or Friday. For Georgia: Local Showers tonight or Friday. Showers, In tin- Cotton Belt, were mainly confined to the South Atlan tic states, also to Memphis and Lit tle Itoek districts with heavy to ex cessive rains in South Carolina. A depression of moderate depth overlies the lake region, and lias caus ed light ralus In that section, also In the Ohio and middle Mississippi valleys. Pressures continue low over the Rocky mountain districts, attended by rain along the northwest border of the country. It Is cooler In NUw Engl ami, upper Missouri sod upper Mississippi val leys and warmer over the greater por tion of the lake region, includjua D»e upper Ohio vatlqg. DAILY AND SUNDAY, $6.00 PER YEAR. 1 PROMINENT WHISKEY MAN THREATENED WITH ARREST TWO WILL OIL 8T WRECK ON SOUTHERN Special to The Herald. COLUMBIA. S C. Hi l!u- derail men! of extra freight train No. 275, northbound, on the Savannah-Colum bia line of the Southern railway s Columbia division, at 9:55 o’clock Thursday morning, til a water and flag stop, located seven miles south west of Columbia, in Lexingtun coun ty, Engineer Win. H. Turner, of Co lttmbia, was fatally Injured, and Fireman ,1. Young Carlisle, also of Columbia, is supposed to be dead also. He la missing and It Is thought Ills body Is buried beneath the wreck age. STRIKE 01 GOULD SYSTEH/IRUY RE GENERAL TKXAHKANA, Ark. Wliilo no of ficial statement uh to the conclusions of the sub commit tec of the Brother hood of Locomotive Firemen and HJn ginenien was given out, it is de clared that a final demand is to be made on the Texas am] Pacific road and that an unsatisfactory reply would doubtless result in a call for a general strike on tin* Gould system. REV. JOITeDEN GOMESTQAUGUSTA Has Tendered Resigna tion To Cuthbert Baptist Church To Accept Pasto rate of Curtis Church. CUTHBERT, On. Rev. John F. Eden, pastor of the Cuthherl Baptist church, has lender*‘d his resignation, to take effect the first week In Au gust. He resigns lo accept a call lo the pastorate of the Curtis Baptist church, In Augusta, Ga. During tho pastorale of Mr. Eden of several years, the church lias made steady growth. L L BIDS BUDS THE lINDERTm Special to The Herald. SAVANNAH, Ga. The Georgia Fu neral Directors’ Association .after a two days' meeting at T.vbee, adjourn ed tills afternoon to meet next year in Atlanta. The following officers were elected: E. 1.. Bonds, Atlanta, president; M. D. Daniel, Rome, vice president; 15. L. Almand, Mansfield, secretary; S. C. Kytle, Carrollton, treasurer. Wlicn Loft, the candy man, started to advertise only a few years ago, the largest space that lie ielt he could afford to use was a two-inch adver tisement. lie had a small store, very little money, but he had a lot of pluck, energy and ability. He kept that two-inch advertisement iniuiimr as steadily as the ticking of a clock. And, * above all ,hc had the good sense to re iterate one thing only, viz.: Good, pure candy at a reasonable price per pound. The business grew rapidly. 11 is advertis ing space increased slowly hnt steadily. He never splurged or used sense!ional advertising, It was constant, ever- “One paper in the home is worth a thousand on the highway,'* State of South Carolina Came Near Taking Out Warrant For H. L. Solo mons, On Charge of Perjury. Special to The Herald. Ct*U Mill A, S. C There was a m ar arrest on charges of perjury of H- L. Solomons, a former liquor drum mer, who did business with the state dispensary, while he was testifying on the twenty five thousand dollar claim of the Big Springs Distilling company, which claim Is owned by E. \ Saunders company, of Richmond. Tim prosecution was questioning him on an alleged agreement signed by him and liquor salesmen Jack t'lauston, M. A. Goodman and fillers, when Dispensary Directors Black. Ituwllnson and Wylie came Into office, lo arrange a new system of rebating whereby a scale of rebat ing at sn much a case and barrel to •be directors was to be paid by all whiskey men alike, lie denied all knowledge of this agreement. He also denied paying anything of value to any agent of the state. He de nied contributing to the fund of $2,500 to help Editor George R. Koester run Ids paper In Columbia, though he had heard of lids fund being raised. He might have contributed to a fund to defeat the Bryce local option act, but denied contributing to the fund of five thousand dollars to help Dispen sary Commissioner Tatum release a big hunch of claims which Attorney Mordecal told the crowd Attorney General Lyon was about, lo have en joined. Started for Warrant. His testifying was suspended and Ihe state representatives went out to gel a warrant for Mr. Solomon's ar rest, but on the advice of the attor ney general it was thought best to abandon this course, as nrreHt at this time would force the state to show Its hand 111 proving the perjury. It was considered unnecessary to make this sacrifice, hs Solomons is under stood lo ho a man of much property, being interested In a bank, farm and newspaper at Estelle, S. C„ where Mr. Tatum Is said to be Interested with hint. He said he made about fifteen thousand dollars s year sell ing liquor to tho stale board. Mr. Solomons Is prominently connected in Savannah and has Influential kin In the lower portion of this state. Solo mons had stock in arid solicited for a Georgia Kentucky whiskey house of Savannah, of which company John Black's brother-in-law was treasurer. ATLANTA WORKS FOR BIG CONVENTIONS Special lo The Herald, ATLANTA, Ga.—Atlanta will make a strong effort to secure the next an nual meeting for Atlanta when the Grand Ixidge of tho Independent Or der of Odd Follows meets in Seattle Hilh summer. The meeting will bring 25,000 visitors as well as the 2,000 representatlves who are appointed to attend for the different organizations of the United States. It Is stated that efforts will be made to secure an en tertainment fund netting approxi mately $15,000. Atlanta will also make an effort to secure the next annual conclave of the International Typographical Union In 1910. A committee repre senting the Atlanta Typographical Union conferred with a committee from the Chamber of Commerce, In regard to the matter. A delegation will attend the national convention In St. Joseph, Mo., in August, to present Atlanta’s invitation. Listing reiteration of quality and price. Peo ple who read his an nouncements believed i hem; and believing, bought. The point about this story is that there are many merchants in this city who can commence advertising as Loft did find make a success of it if tlicv will also do as Loft did TELL THE TRUTH, REITERATE THE. TRUTH and hack it up with THE GOODS Any shrewd advertise** cfiii conduct a successful advertising campaign by running even a two-inch advert isement several t imes a week in THE AUGUSTA HERALD. Let ;t representative of The Herald talk it over with you .just give you “i i few facts and figures.”
