Indianapolis Times, Volume 43, Number 298, Indianapolis, Marion County, 22 April 1932 — Page 17

Second Section

UTILITY GIANT CRASHES Sam Insull Rides to Colossal Fall

Thl i thi- second of two stories on the rise and fall of Samuel Inanll, America's foremost public utility manate, whose riant Middle West Utilities Company is in the hands of receivers in k the tartest business default In the World's history. BY JOHN W. LOVE fCoDvright. 1932. NEA Service. Inc.) THE story of Samuel Insull's rise as a public utility magrate, recently climaxed by the receivership of his giant Middle West Utilities Company, which was worth $2,500,000,000 at its peak, is no more amazing than the story of how he operated financially in building up his billions. Besides the physical expansion of Insull's companies .ran his remarkable financial system, equally the product of his genius. It is | his financial system, represented by his holding companies, which Is in trouble now. The operating companies are not involved in the receivership. Just before the World war, Inkull set out on his campaign of conquest, buying property after property, scrapping little power stations and building new and larger ones, stringing his lines across the prairies and the mountains and along the lakes and the rivers and gulf. Gradually, his operations spread Into thirty states, from New England to Texas, in a wide variety of utilities which included ice plants, gas plants, and other lines, but was mostly power. a * tt AS Insull built an electric system, he paid for it by bonds or notes which he sold to the public. He retained part of or all the common stock, which was the voting stock—and therefore controlled the company, though ! he might have very little money j in it. Then he would sell his common ! stock to a holding company of his own, which owned the stocks of j several similar properties. Next he would issue notes with j the stock of his holding company as security, and sell these notes to the public. This would give him funds to buy several more properties and form them into a similar holding company. After he got together a series of holding companies, he would unite them under another holding company, a sort of superholding company, and repeat the process. Frequently he would retain only

CONGRESSMEN HIT AS BONUS COWARDS

Rep. Hamilton Fish Declares Bill Should Be Sent to House Floor. i.v J nited Prcx WASHINGTON. April 22.—Representative Fish (Rep., N. Y.) accused the house ways and means committee of “lack of leadership and courage" today, appearing in opposition to the $2,000,000,000 soldiers’ bonus bill. “It's time this bill was reported back to the floor of the house, and got out of the way," Fish told the committee, declaring business confidence was being held back by the present procedure. He urged a federal bond issue up to $2,000,000,000 if necessary “to give employment on construction projects to those out of work.” He suggested it be called the “two-year plan," iu.o Florence given to unemployed veterans. Fish, as well as Representative Andrew (Rep., Mass.) and Representative Lea (Dem., Cal.) attacked the Patman bonus bill as a dangerous inflationary measure, likely to force the country off the gold standard. The measure proposes to issue of $2,000,000,000 in new currency. The three opponents of the bill laid they favored reduction in interest payments for veterans on their loans on adjusted service certificates. Fish would make the interest charge "either 2 or 3 per cent” instead of 6. Stevens Voices Protest Protest of Henry L. Stevens Jr., national commander of the American legion, against moves to lower compensation paid to disabled war veterans, was before the house economy committee today. In a wire Thursday to Representative John McDuffie, chairman of the committee, Stevens attacked the proposal as an “attempt of the government to cheapen itself at the expense of men who bear in their bodies the eternal scars of honorable war service.” “The legion will not stand idly by while the heart rs the disabled veterans’ law is cut out,” Stevens wrote. Assassin Sentenced to Death TOKIO, April 22.—The youth named Sakoya, who shot and killed Premier Yuko Hamaguchl, was sentenced to death today in district •ourL

•foil Leaned Wire Nervi re of the HnUed Preea Association

Intull Util. Corporation Stcur.tie* MIDDLE WEST > ' 1 UTILITIES CO. | f~ ! TANARUS, j-, . Scranton Street Ry. ™ , MHmjmh J

Though successful in building up a chain of public utilities worth billions, Samuel Insull experienced disappointment in his efforts to promote his wife’s comeback as an actress and in trying to make his model electrified farm near Chicago show a profit. Above is a scene from his model farm which lost money steadily. At the

a fraction of the stock of a holding company and sell the rest to the public, in little lumps. While the public would hold most of the stock, Insull would have by far the largest lump, and that gave him the management. Often he would not sell the stock, but only voting trust certificates, which left unquestioned control with Insull and gave the stockholder the dividends. Insull believed in customerownership, but not stockholders’ “interference.” tt a u SO long as prices of public utilities were rising, and more and more people were using current, and more and more had money to invest in the securities Insull always had for sale, there was no end to this method of expansion. There were only two or three ways this sort of thing ever could come to a stop. One would be when Insull and others who were doing the same thing had bought all the power plants in sight. Another way would be when Insull and his rivals began bidding against each other for properties, and paying prices much higher than they need to be. A third way would be when the bottom would drop out of prices,

Rolling Own Bp United Press WASHINGTON. April 22. Ec o n omy-minded Americans are cutting down on their consumption of ready-made cigarets. For the first nine months of the fiscal year, the government collected $27,525,098.16 less in cigaret taxes than last year. At a 6-cent tax, this represents a drop of 4,587,516 packages.

NAB 3 IN HOLDUPS Cops Say One of Suspects Has Been Identified. Three men suspected in two robberies are held by police today, and one is said to have been identified as having taken part in a holdup at Taylorsville two weeks ago. The other holdup occurred Sunday night near Mooresville when a party of motorists was robbed of sls. Those held are William Dougherty 19, of 810S South Meridian street, said by police to have been identified in the Taylorsville case; David Rodgers, 28. of 1363 South Sheffield avenue, and Ea*l Akers, 21, of Indianapolis. Dougherty had been at liberty on parole from the state reformatory to which he was sentenced for robbery and kidnaping, police said. DELAWARE SENATOR IS LIKELY AS KEYNOTER Former Supreme Court Judge Is Pondered for Convention. Senator Daniel O. Hastings of Delaware may be named keynoter for the Republican state convention here June 8 and 9. according to Ivan Morgan, state chairman. Hastings, formerly was a Delaware supreme court judge and was appointed to the senate in 1928 to succeed Coleman Du Pont. He was elected for a full term in 1930. Morgan has invited department heads of the statehouse and federal building to be guests at the Severin Bxt Tuesday night, where political velopments will be discussed.

The Indianapolis Times

right is Mrs. Insull, formerly known on the stage as Gladys Wallis, upon whom Insull spent $200,000, in financing her attempted comeback. The chart shows how Insull’s hundreds of far-flung utilities were operated through a series of tyramided holding companies.

including the cost of building a power plant. All three things happened, more or less. Toward the end of the great bull market in stocks, and even well into 1930 and 1931, Insull was paying high prices for properties he wanted very much. His companions kept on building, thought at a less rapid rate. They ran up bills and had to borrow from the banks. They ceased to be able to sell stocks to the public at the old speed, or even to sell stocks at all. Finally, their companies began to lose money. tt M tt ONE of the companies which lost money happens to be a street railway in Scranton, Pa. This street railway can be used to illustrate how the Middle West Utilities was put together. The railway had a bonded debt of $7,000,000. It had $2,000,000 worth of common stock. This common stock was owned by the Municipal Service Company, which also owned other properties. The Municipal Service Company had a funded debt of $5,000,000 and capital stock besides But the Municipal Service Company was controlled by the National Public Service Corporation, which also owned other properties. National Public Service had borrowed $20,000,000 on the security of its stock in its subsidiaries, and had sold its own stock. But National Public Service was controlled by the National Electric Power Company, and on the security of its stock in National Public Service and other subsidiaries it had sold nearly $10,000,000 in notes Finally, National Electric Power was owned by the Middle West Utilities Company, the big Insull property which is now in trouble. The Middle West Utilities Company’s subsidiaries, all of them together, had borrowed hundreds of millions, and Middle West Utilities had itself borrowed nearly $100,000,000. # tt tt ABOVE the Middle West company were two more Insull holding companies. Corporation Securities, Inc., and Insull Utilities Investments. Naturally, this inverted pyramid of finance was a fair-weather sort of structure. So long as the myriad subsidies made money, the profits would pile up in a golden flood and pour in on the topmost holding company. But if many companies, like the little Scranton electric railway, began to lose money, the whole structure would lose money pretty fast. It would lost faster than than anything could be done about it. Middle West Utilities tried to save the situation by lending money to its subsidiaries, and these by lending money on down, and finally the loan would get down to the Scranton Electric, but as many little properties needed money they used it up faster than it could be furnished. And so the far-flung Middle West holding company finally toppled over. KM* DESPITE his rise as a power magnate, Insull had his disappointments. He could not make his experimental electrified farm pay. He had spent $200,000 in financing his wife's attempted comeback as an actress, but the effort failed. She had been on the stage before their marriage. He had been forced by the United States senate to admit he had liberally financed Republican and Democratic campaigns. He also financed the famous Chicago Civic Opera through many an unprofitable season, and now is having to leave it to stand on its own feet. No master of diplomacy, Insull had gone directly after what he wanted, usually by buying it. The faster he bought, the faster his fortune grew, but the tidal slip of commodity prices finally overthrew him.

INDIANAPOLIS, FRIDAY, APRIL 22, 1932

FRIENDS WILL RENEW FIGHT FOR MOONEY Liberal Congressmen Voice Their Disappointment at Pardon Refusal. URGE SENATE ACTION Resolution Asks Printing of Report Drafted by Wickersham Group. By Scripps-Howard 'Newspaper Alliance WASHINGTON, April 22.—Disappointed, but undaunted, liberal members of congress today declared their intention of carrying on the fight for pardon of Tom Mooney in spite of its denial by Governor James Rolph Thursday. First phase of the renewed battle will be to press in the senate, perhaps today, the Cutting-Costi-gan resolution to have printed as a senate document the 600-page report of the Wickersham commission experts. This report, citing “flagrant violations of the statutory laws of California” in the Mooney-Billings trials,” charging that “witnesses were coached” to a degree that approximated subornation of perjury.” and making other serious charges, is before the senate. The resolution to have it printed as a senate document has been reported from the senate judiciary committee, Norris Favors Action Senator George Norris (Rep., Neb.), chairman of the judiciary committee, today said that the report “ought to be printed.” He favors immediate action. So do Senators Bronson Cutting (Rep., N. M.), and Edward P. Costigan (Dem., Colo.). Liberals of both houses expressed disappointment at the Rolph decision and determination to continue the fight for justice for Mooney and Billings. Among those who so expressed themselves were: Senator Wheeler d?em., Mont.)— I do not agree with the conclusion reached by Governor Rolph. I think that, in view of the agitation for Mooney’s release, psychologically, it would have been beneficial if Governor Rolph had seen fit to pardon him. After all, there was admittedly perjured testimony. And who can say how much weight the jury gave to that testimony? No man should be kept in jail when it is admitted that perjured testimony helped put him there. Regretted by Bratton Senator Bratton (Dem. N. M.)— Very regrettable. I always considered Mooney innocent. Undoubtedly the fight to free, him will be kept up. Representative La Guardia (Rep., N. Y.)—Even this last decision does not change the firm belief of millions of people in this country that Mooney was framed and is an innocent man. His friends will not lose hope and will continue their efforts to liberate him. Senator Copeland (Dem., N. Y.)— I really am shocked, and terribly disappointed. I thought surely something would be done. Senator Blaine (Rep., Wis.)—Of course the Governor’s action is to be regretted very much by those who believe in Mooney’s innocence—and those who have studied his case are in no doubt about his innocence. Senator Schall (Rep., Minn.)—lt is a shame. Tom Mooney is innocent as you, and I am convinced of that. All unprejudiced people feel he is innocent. I don’t blame Mooney for not accepting a parole. I am willing to go any distance in a renewed fight to get Mooney out of prison. Nye Says “Carry On” Senator Nye (Rep., N. D.)—After all these years of effort, the Governor’s decision is most disappointing. There is only one thing for friends of the Mooney cause to do, and that is to carry on. Ultimately, success will be won, just as success always is won, ultimately, for a worthy cause. Senator Wagner (Dem., N. Y.)— I am disappointed grievously. I was very confident that the application for a pardon would be granted. Representative Rainey, (111., Democratic house leader) —I regret it very much. There was tremendous sentiment for his pardon throughout the country. It is too bad. SUICIDE’S BITES SET Services Slated Saturday for Veterinarian. Funeral services will be held Saturday for Dr. Ernest E. Lang, 45, a veterinarian, who committed suicide by poisoning in a downtown hotel. The body was found in bed Thursday by a maid. Dr. John E. Wyttenbach, deputy coroner, said Dr. Lang had died about thirty hours previously. Despondency over ill health was advanced as a probable cause of the suicide by the victim’s father, Elmer Lang, 1441 Lee street. Dr. Lang recently was granted government compensation for disability incurred while in World war service. He resided at 1437 Steele street and maintained an office at 370 South Meridian street. Services will be held at 2 Saturday afternoon at the J. C. Wilson mortuary, 1230 Prospect street. Burial will be made in Washington Park cemetery. PARTED IN 19107~REWED Divorced Connie Marry After 22Year Separation. By United Press DETROIT, April 22.—Alexander F. Wegener, 46, and Blanche B. Nass, 46, who were divorced twentytwo years ago, obtained a marriage license to rewed. Both were married and divorced duriaj the interim.

RICHEST PEOPLE BROKE Bubble of Wealth Bursts for Osages

Rolling in the wealth that came from oil beneath their tribal lands, / . jHfigfr V 1 \ Osage Indians—only a few years removed from the tepee and the / \ campfire—built palatial homes like that of Standing Bear, which is / >\ shown here. Above is an Osage girl of the new generation and, at the f right, a typical Osage squaw and a papoose. M. -A k A } The new economic order in the oil in- lease Sale returned the Smallest Vr lustr, which has been marked by the amount in historv, $27,900. Less 3 I ecent price increase to 51 a barrel, also tha a lhird of the tracts that ' WzWHU&S--*. *** m * rke * * he nas*‘n* "America’s Tnriifln ai?pnrv n ff PrPC i r.. prp ;rcatest ramble,” when huge and sudden bought agCnCy ° ner " d Were (TT* °Xhis-the er fo“th e stor.Y in a scries of Accustomed to lives Os gIOHOUS I!* i vc—is the colorful story of the Osage ease, now faced with a tremen- aEsa:! ndians who rose to wealth during the dOUS decline in income and having id* '•.. J.J, imm } ra of great production from their lands. practically no Other source of || BY ROBERT TALLEY people in the world” are finding \'/ NEA Service Writer it difficult to adjust themselVCS to \V. V. "jjj-j- > " : l. j| A • Wj& ft/ (Copyright. 1932. NBA Service. Inc.) present conditions. j j jtf* / PAWHUSKA, Okla., April 22. Very few of them have saved ' >nl< v: ifrs In the colorful drama of for- an y money, as money that came V* easy went, t.hp samp. wav. ——— —

Rolling in the wealth that came from oil beneath their tribal lands, Osage Indians—only a few years removed from the tepee and the campfire—built palatial homes like that of Standing Bear, which is shown here. Above is an Osage girl of the new generation and, at the right, a typical Osage squaw and a papoose.

The new economic order in the oil industry which has been marked by the recent price increase to SI a barrel, also has marked the passing; of "America’s greatest gamble,” when huge and sudden fortunes were made. This—the fourth story in a series of five—is the colorful story of the Osage Indians who rose to wealth during the era of great production from their lands. BY ROBERT TALLEY NEA Service Writer (Copyright. 1932. NEA Service. Inc.) pAWHUSKA, Okla., April 22. In the colorful drama of fortune which has marked the great gamble of oil, the story of the rise —and fall—of Oklahoma’s Osage Indians is one of the most picturesque of all. A few years ago they were known as “the richest people in the world.” The income from their oil lands, owned jointly by the tribe, netted about sl3|ooo a year for each member holding one of the 2,229 “headrights” that were allotted when the tribal rolls were closed. Today, these payments have > droppd to about SBOO a year. While the decline in the price of oil has been responsible for much of this, the real reason is that the Osage wells are playing out. Production has dwindled to a fraction of the peak figure and no new oil pools are in sight in their area. The clearest story of what has happened since the peak was reached in 1925 is told by the records of the tribe’s income from oil and gas. as obtained from the United States Indian agency here: Fiscal Tribal Year Income 1935 829,584,739 1926 21,338,385 .1927 17.315,910 1928 12,862,335 1929 9,180,661 1930 5,704,160 1931 1,716,330 nun AN indication of the dwindling Osage oil supply is the fact that oil men no longer bid feverishly for leases on the Osage lands. In 1923, nearly half of the tribe’s total income of $27,000,000 was in the form of bonuses paid for such leases. O" March 22, 1932, one Osage

MOVE TO RESUME TRADE WITH RUSSIA IS SPURRED

BY WILLIAM PHILIP SIMMS United Pres* Financial Editor WASHINGTON, April 22.—Advocacy by Senator Joseph E. Robinson of Arkansas, Democratic leader, of normal relations with Russia as a step toward world peace and unemployment relief, today gave impetus to Capitol Hill’s opposition to the virtual United States boycott against that country. Declining exports, department of commerce figures indicate, have caused widespread unemployment in every state save one. The exception is Virginia, whose leaf tobacco and apple exports slightly increased in value. Calculations based on Secretary of Commerce Lamont's tables show that between two and three million American workers either lo6t their jobs or otherwise were affected by the more than 50 per cent slump in this country’s exports. “More than 1,400,000 workers, re-

COVERUP CHARGED ON LOBBY INQUIRY

By Scripps-Howard Newspaper Alliance WASHINGTON, April 22.—William B. Shearer charged today that the report of the senate investigation into his “big navy” lobbying at the 1927 Geneva disarmament conference had been suppressed because it would involve Andrew W. Mellon, ambassador to Great Britain, and Henry M. Robinson of California, personal friend of President Hoover. In making a personal demand that a report be submitted to the senate by Senator Samuel Shortridge (Rep., Cal.), chairman of the investigating committee, Shearer declared that both Mellon and Robinson are important figures in the three ship-

lease sale returned the smallest amount in history, $27,900. Less than a third of the tracts that the Indian agency offered were bought. Accustomed to lives of glorious ease, now faced with a tremendous decline in income and having practically no other source of revenue, these erstwhile “richest people in the world” are finding it difficult to adjust themselves to present conditions. Very few of them have saved any money, as money that came easy went the same way. “They wanted money for the pleasure and comforts it would bring,” a Pawhuska business man explained to me, “and they spent it as fast as they got it —and often before. “They built $35,000 homes, furnished them with the best that money could buy, never quarreled about the price of anything, bought the highest-priced autos obtainable and perhaps wrecked )wo or three of them a year. * u n a strange urge to W travel, they went all over the country, often driving as much as 50,000 miles a year, and staying with their families at the best of hotels. They never worried about tomorrow as long as they had enough money for today.” Less than a generation ago they were living in tepees, trying to eke out a meager living by scanty farming and stock raising on the rocky hills of their Oklahoma reservaiton to which the government moved them so the white man could take their more fertile lands in Kansas. One day in 1896 the tribal council, attired in headdress and feathers, met in their council house where Pawhuska, Okla., now stands, and adopted a resolution stating that because oil had been found nearby “we believe it possible that oil may underlie our lands.” With the sanction of the government, they leased mineral rights on the tribal land and oil prospectors went to work. And oil did exist under those rocky farms. Since 1900, when production began, it has poured out to the Indians a golden flow for a grand total of approximately three-quarters of a billion dollars.

ceiving more than $1,500,000,000 in wages,” Lamont observed, “were directly engaged in producing goods for export in 1931. Furthermore, there probably was an equal additional number employed indirectly in service activities and in supplying the needs of those engaged directly.” But, as Senator Robinson pointed out, 1931 United States exports were less than half the 1929 exports. Such being the case, there must be only about one-half as many Americans producing for export now as there were two years ago. Unemployment estimates, based on commerce department export figures by states, reveal that, with the possible exception of Virginia, no state is without its quota of those hit by the slump in foreign sales. New York, it is estimated, has approximately 250,000 affected workers, and a similar number indirect-

building corporations which employed him in an alleged effort to wreck the conference. In many circles the lobbyist’s activities were held responsible for failure of the disarmament program at that time. Mellon, according to Shearer, owns mok of the bonds of the New York Shipbuilding Corporation, and is a large stock holder in the Bethlehem Steel Corporation. Robinson, Shearer pointed out, is '-hairman of the board of the Newport News Shipbuilding Corporation. These are the three firms which sent Shearer to Geneva, and which he sued for more than $200,000 in fees a few years ago. The investigation was conducted in IS^9.

Second Section

Entered ■■ Second Class Ustter at Postcffic*. Indianapolis

YEAR by year production increased, until it reached the peak of nearly 42,000,000 barrels in 1923. And in addition to royalties from production, big companies rushed to the rich Osage field to buy oil leases at public auctions conducted by the government. From 1920 to 1925 the golden flood was at its height. In 1920 tribal receipts almost doubled those for 1919 as income soared to $18,000,000. Receipts advanced steadily until the peak of $29,584,739 was reached in 1925. Then they started down. They have been coming down ever since.and with increasing speed. The big homes that many of these Indians built around Pawhuska in their days of prosperity are as modem as those to be found anywhere. They have all modern conveniences, and the furniture is the best that money can buy. They are spotlessly clean and well kept. But the Indians themselves—especially the older or.s—have changed little in appcaance since the days when they were living in tepees and cooking their meals over a camp fire. The old braves still cling to blankets and fancy leggings, the squaws to colorful blankets and shawls. M t any of them can not speak English. NEXT: How oil is meeting its problem of overproduction and pointing a path out of the depression for industries in other lines. . . . “Alfalfa Bill” Murray’s action in shutting down the wells last summer and what came of it.

ly affected, or a total of half a million. Similarly, Texas would have nearly 400,000; California, 225,000; Pennsylvania, 200,000; Illinois, 175,000; New Jersey, 150,000; Ohio, 125,000; Michigan, whose exports dropped from $355,000,000 in 1929 to a bare $83,000,000 in 1931, 200,000; Louisiana, 120,000; Indiana, 35,000, and Virginai probably none, thanks largely to Lady Nicotine. Taking the Lamont ratio, it is estimated that orders placed by Russian in this country in 1920-30 gave jobs directly to 85,000 American workers, receiving something like $90,000,000 in wages. Today, 1932 figures indicate, American exports to Russia have dwindled almost to the disappearing point. Likewise, the jobs of those employed producing these goods. Germany, on the other hand, In 1931, sold Russia $220,000,000 worth of her products, financing the business mostly with American money. Thus approximately 200,000 German workers profited by these jcbs. SUIT ASKS DISBARMENT OF ENOS W. HOOVER Bar Association Alleges Attorney Held Escrow Money Illegally. Disbarment proceedings, filed by the disbarment committee of the Indianapolis Bar Association, were on file today in superior court one against Enos W. Hoover, attorney, with offices at 212 Indiana Trust building. Hoover was one of four persons indicted in connection with alleged election frauds in the 1930 primary election. The bar association petition charges Hoover is guilty of a felony in receiving SSO to be held in escrow pending a real estate transaction and that he refused to return the money to hi3 client, even though the escrow was accomplished.

TRADER mis INSIDE SHORT SELLINGSTORY Matthew Brush, Operator on Big Scale, Appears at Senate Quiz. SYSTEM IS DENOUNCED Witness Assails ‘Closing Up and Closing Down’ in Market Deals. By United Press WASHINGTON. April 22. Matthew C. Brush, one of the New York stock market’s most important traders, today denounces the practice of “closing up” and “closing ! down” the stock market as the I greatest abuse in the manipulation of markets. Brush was the first genuine “bear” produced as a witness at the senate banking and currency committee stock market investigation. He said without hesitation that in 1929 he had a $15,000,000 "long” interest in the market and in 1930 was 125,000 shares short. But he protested that he was not an “in and out” trader and knew what was back of the shares he bought and sold. Asked what basis the public acted upon the trading, he said it usually was on the tip of “Heinie and Geegoobler”—two fellows who came over from Greece two months ago.” Layman Given Light For the layman, it was explained that “closing up” and "closing down” meant the practice of brokers putting in a sale at the moment of closing a point or a fraction cf a point above or below the market. The last sale of the dav represents the close, and Brush explained that: “A man in New York will close, perhaps Steel, up a point and a poor fellow out in Keokuk that night will tell his brother over a stein of beer: ‘Gee, look at that market go up. Let’s buy some.’ “They buy the next morning and the fellow who closed it up sells it to them. “I know of instances where a stock closed a point up or a point down. I think the crime of closing up is as great as the crime of closing down, because that fools every sucker in the United States. Brush described himself as a “substantial trader,” president of the American International Corporation and director of “about fifty” other corporations. Started on Small Scale “What has been the extent of your trading?” William A. Gray, committee counsel, asked. “When I started, it was pretty skinny trading—so or 100 shares. I once had a long position of approximately 125,000 shares.” “What was the largest position you ever assumed on the short side?” Gray asked. “About the same.” “One hundred twenty-five thousand shares?” Gray asked. “Yes.” “What did your greatest interest represent in dollars and cents?” Gray asked. “The liquidating value of my position in August, 1929, was in the vicinity of $15,000,000,” the witness replied. “When stocks were climbing before the collapse, were you ever short?” No Big Short Interest Brush said he had no material short interests at that time, but began selling short in the spring of 1930. Brush appeared earnest and courteous. He gave an impression of frankness. He is gray haired, stocky and ruddy. Beads' of perspiration gathered on his forehead. After the first few minutes, when his voice was almost inaudible, he lost his nervousness and soon was delivering a discussion of market, trading methods. “There are two distinct schools both in buying and selling stocks,’ Brush said. “I don’t believe in selling stock: on a scale down or buying on t scale up. “If 1 have a short position in m* mind, it’s an 'investment’ short por tion to me. Can Be Manipulated “I am not a trader from day tt day or during the day. “Stocks can be manipulated. Le us assume that the market has hi bottom, and many men believe j has, if a man wants to get a po sition, he puts in buying orders ot a scale down. “I don’t do that. I rather woulc lose 10 points on the turn than carry them down.” Brush told Gray that marke’ movement of “certain pivotal stocks’ affects, but “does not govern” tht market, adding that short sellinf had an effect on the market to thi extent that it made supply greate. than demand. “I might as well tell you,” Brus’ continued,” I am going to get she when I get back to New York, any way.” Supports Testimony With Chart Brush produced a Dow-Jone market chart to support a conten tion that there was “no genera rule” governing the relation of mar ket values and aggregate short interests. Brush talked far more freely tnai did Richard Whitney, stock ex change president, who had testify for four days and revealed little. Hi conceded to Gray that the short position statistics supplied by Whitnej did not present the full picture o, trading. He charged they did not sho* the in and out movement during the day. “I never buy a stock," Brush said, “that I don't know all about—the statistics and management.” “What is the basis on which the average man buys stock?” asked Senator Glass (Dem., Va.). “I wish you could leave this off the record,” Brush replied, “but the basis on which the average mm buys is pathetic.”