Jasper County Democrat, Volume 15, Number 74, Rensselaer, Jasper County, 18 December 1912 — MILLIONS LOANED OVER TELEPHONE [ARTICLE]

MILLIONS LOANED OVER TELEPHONE

Congress Learns of Vast Transactions in Gotham. HIGH RATES COUNTRY DRAG L Consolidated Members Explain That They Are Prohibited From Having Deals With New York Stock Exchange. Washington, Dec. 13.—“‘Millions and millions of dollars are loaned over the telephone in the course of regular business by the New York banks,” testified J. H. Griesel of Griesel & Rogers at the house money trust investigation. i Differences between the New' York stock exchange and the Consolidated stock exchange and the effect of the stock exchange’s bar against Consolidated brokers also were aired. Half i dozen members of the Consolidated exchange, including President Miguel DeAguero, were examined by Samuel Untermyer, counsel for the committee. They explained that under the rules of the New York stock exchange they were absolutely prohibited from doing any business with members of that organization, and charged that their business had been curtailed by the prohibition. Banks Lend Millions, j Prior to the examination of the Consolidated exchange witnesses, the committee heard several money brokers operating in the “loan crowd” on the New York stock exchange. They testified that an enforced low rate of interest would prevent the movement of money toward New' York rom country banks, when the money was needed at home points. "Sometimes.”' Mr. Griesel said, “$3,500,000 or $4,000,000 is lent within fifteen or twenty minutes, this volume of transactions serving as a basis for rates on renewal of loans. I have lent sometimes $20,000,000 or $25,000,000 a day and borrowed perhaps $15,000.000 on a single day. I have lent las high as $35,000,000. I represent j the borrower rather than the lender and of course I get the benefit in the i loaning transactions.” Mr. Griesel said J. P. Morgan & Co frequently loan at the exchanges, though sometimes several months may elapse between their transactions. He said the principal lenders were the National City bank, the Chase National and the Bank of Commerce. Put Out Proceeds From Bonds. Kuhn-Loeb-, he added, sometimes lend as much money as any of the banks do. “That’s when they get in money from some large bond issue, i The same as to Speyer and the Morj gan company,” he said. Mr. Untermyer endeavored to establish that steel common was con- ; sidered a good collateral because of thd wide market for the stock. Mr. Griesel said that brokers w'ould accept i more New York Central than steel |. common as collateral for a loan, j The method of lending money in ; “the loan crowd” on the stock 'exS change was described by the witness. | He said that New York banks lending for out-of-town banks usually made known the banks for which they are lending. > /■ "What would be the result of fixing a njte of interest on money on the stock exchange?” asked Mr. Untermyer.

Why, it would keep the money at home in the country banks,” answered Mr. Griesel.