Michael J Meehan 24 Apr 1932

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Michael J Meehan
24 Apr 1932 - BLL ST. NOTABLES FIS1H0BE Smith, Bragg,...
BLL ST. NOTABLES FIS1H0BE Smith, Bragg, Danforth Have Won Renown for Market Activities ws-W YORK, April 23 (A. P.K Vver on the alert for "inside infor-1 mation" into pool operations and liv'ic market speculation. Wall street today gave unabated atten-liion to the Washington parade of heading market figures before the Jsenate Committee. I Bernard E. Smith and Thomas t Brags. wno to015 tne witness chair 'today, have been two of the outstanding figures in trading activities. I William (Big Bill Danforth, who ilias been called to testify later, is ! known as Wall Street's original 1929 Ibear. Michael J. Meehan, whose spectacular rise in'Wall Street from fa theatre ticket broker to head of la large stock brokerage house is a 1 Wall Street epic, is one of the 'street's most durable bulls. I Fred J. Fisher, William F. Kenny Lnd John J. Raskob, who were men- In the liparincs toriav. nre M MUUCU V ' -r- - names which conjure up stories of I SUccess in business and finance, and, lin the case of Raskob and Kenny, 1 command attention in the field of f politics. Smith Consistent Winner Bernard E. Smith does not attempt to exploit his skill to the public. He Is not a Babe Ruth when it comes to showmanship, but for consistent success in the stock market. Smith I has had few peers. BtOCKy Ul uuuu aiiu a DpeaMii viivj appreciates economy of words, Ben Smith has built something of an aura of mystery about himself. To his intimate friends, he is known as a charitable individual who, however, brushes aside any semblance of flattery and flattens out the insincere approaches of would-be camp followers with a great saving of verbal effort. He is reputed in Wall Street to be hard-boiled, but in his home of Bedford Village, N. Y., a $mall town just outside of New York City, Ben Smith is known as a soft-jpoken family man. Ben Smith personally is looking ifter the unemployment problem in his own town. A short time ago the church of which he is a member decided it should have a new building. The necessary money was raised, but before a new building could be erected it was necessary to sell the old. The market for worn out church edifices was poor, but Smith solved the problem by buying the church building himself. He is probably the only member of the Stock Exchange who owns a church. Bragg Bearish Since 1929 Thomas E. Bragg, who was associated with Smith in some of the latter's 1928 and 1929 market activity, does not have the reserve of his friend. Bragg is loquacious and makes no effort to conceal his belief that stocks are either too high or too cheaD. Bragg, like Smith, was long of stocks in 1929, but turned bearish in 1930. He has been reported short of sizeable blocks of leading stocks like U. S. Steel, American Can, American Telephone and International Business Machine. Bragg u an associate of Matthew C. Brush. William (Big Bill) Danforth is one of few men who went short of the market before the 1929 collapse and ras able to survive the last mad uprush of prices before reaping his profit. But unlike smitn ana Bragg. Danforth turned bullish toward the middle of last year. He held that It was unsafe to be short of the market. He covered his commit ments and went long of some stocks, including Bethlehem Steel. Whether he held on through their later decline is not known. Danforth, who is in his early forties, hails from Boston and has many characteristics of the traditional Yankee. He is well over six feet tall, slender and reserved.. Fisher Business Leader Fred J. Fisher is the oldest of the seven Fisher brothers.- His fortune was based on the founding, with his brotner, Charles, of the well-known Fisher Body Corp. From a $50,000 Business m 1908, they nursed tins enterprise into one doing business of 1150.000.000 in normal business years. Fisher was born in Ohio over 50 years ago and his operations are said in Wall Street to have been principally through .Detroit stock brokerage offices. John J. Raskob, chairman of the Democratic National Committee, has been an associate of Fisher. Both hive played active roles in the growth of General Motors. Raskob is known to have purchased large blocks of stocks in various corporations, but has not been identified Publicly with the short side of the market. William F. Kenny, New York contractor and life long friend of former Governor Alfred E. Smith, is a Political associate of Raskob. Like Raskob, he was long of stocks in 1929, but little has been heard of his operations since. BEARS LIST RASKOB AMONG Continued From First Page lished, and after promising the full leport of transactions from his private records, told Mr. Gray that he had "mostly had a long position In stocks prior to the summer of 1929, and mostly a short position since." Protesting that he "didn't know whether the quantity could be considered important," he estimated that he had been "short as much as 50,000 shares at one time, but right now my short accounts are between 12 000 and 15,000 shares." Senator James Couzens, (R., Mich.), switched the examination to specific transactions in which he had associated with Mr. Rockefeller. When the witness told of the purchase during 1928 in joint account with Mr. Smith and Mr. Rockefeller of a considerable block of Lima Locomotive, Senator Couzens demanded to know "who promoted the deal." "Mr. Rockefeller suggested the stock," Mr. Bragg responded, demurring to the use of the term "promoted." "He said Lima Locomotive had quick assets of so much, and was good. We put up $50,000 apiece but the stock didn't move." Lost $20,000 Each "Who suggested that you sell," Senator Couzens pursued. "I did," Mr. Bragg replied. "We naa a wss; i. inmk we lost about $20 000 apiece." "Was Mr. Rockefeller in other pools?" Senator Couzens continued "Yes, in two in Anaconda," said Mr. Bragg. "One was a big one taking in 190,000 shares of stock, with many people in it." "How much did you put in?" "About $500,000," Bragg replied. "I think Mr. Smith put in a half million, and Mr. Rockefeller $120,000." Directed "to go ahead and name the others," Mr. Bragg said that Michael J. Meehan. a Stock Exchange member; John J. Raskob, Fred Fisher, and W. F. Kenny were In the group. Later Mr. Smith added W. C. Durant to the list, and thii time of the pool's formation was fixed as early In 1929. Lost $400,000 "How did the operation come out?" Senator Couzens inquired. "I lost $400,000." Mr. Rrntrcr rraifpcs. ed. "I was one of the managers. miners may nave lost more. This pool was closed up by distributing the stock, pro rata. We had paid around $170 for the stock, and I immediately sold mine, when it was down around $100. Others may have hung on and lost more." "Who organized this operation?" Senator Couzens asked. "I really don't know," Mr. Bragg returned. "I was in Flnriria at t.hn time, and Mr. Meehan and Mr. Smith invited me to come in." "What representations were held out to get people to join?" Senator Couzens pursued. "Possible profit," Mr. Bragg told him bluntly. "Did you investigate the possible value of the stock when you went In?" Senator Couzens asked. "No, I Investigated afterward, though," the witness retorted, while the crowded committee room echoed with laughter. "Then I concluded the stock was too hieh. much inn high, even though the metal It pro- uuuea was up, ana earnings were based on 24-cent copper." Denies Manipulations Mr. Gray took over the examination, announcintf after ralrMilntlnn that the Anaconda pool under discus sion meant at one time "more than a $32,000,000 investment." "Tell me why you and your associates, men supposedly wise in the market, would buy that stock unless you had some way to put it up?" he asked. "Well, there was 24-cent copper at the time," Mr. Bragg suggested. "As a matter of fact," the lawyer pressed on, "wasn't that pool formed because of the ability of this group to manipulate the market?" Here Mr. Bragg dissented, asserting that he "didn't know about any manimilations." "Well, what did you do?" Mr. Gray asKca impatiently. "Just buy the stock and wait for it to go up?" "I don't know that thpre Is mnnVi to do." Mr. Bragg protested. "I don't just know how to tell you." "Oh. be a little frank with this committee nnri tpll ns snm truth " Mr. Gray adjured him. "You didn't jusi laKe a:,uuu,uuu into ine marKet and then sit down and wait. Tell us some truth " "I'd be glad to tell you, and tell you the truth," Mr. Bragg responded. "This stock was bought, and bought up nign, and then nothing happened ine market went aown. Objects to "Bully-ragging" "What did you contemplate doing to maKc a protitv uray demanded "the manipulation to make a profit is wnat we are alter. i aoni tmnk mere was any manipulation, Mr. aragg protested Then Senator Carter Glass (D., Va.), cut in. "I protest against bully-ragging t.ne witness mat way," he said, "though I'm as anxious to get the facts as anybody on the committee." This intervention drew in several committee members, but Mr. Gray, it , ' ' II V ' . ... lMsm? - Thomas E. Bragg (left) and Bernard E. Smith, prominent stock the Senate Finance Committee yesterday the operation of several big $32,000,000 Anaconda Copper pool in which they were associated with Durant and William F. Kenny, and in which they lost heavily. had, naming Radio, Briggs1 Manufacturing, and St. Louis Southwestern as securities taken into operations. He said that in one of the Radio pools, Michael J. Mcchan, at the time the stock exchange specialist in the transactions in that particular stock, was also an operator. "In that case, we have the special ist on the floor co-operating with the pool outside," Mr. Gray commented. Then Senator Peter Nor- beck iR., S. D.), chairman of the committee, took a hand, and the witness was led into a discussion of the rise in copper metal price which accompanied the Anaconda stock gyrations. There had been then, Senator Norbeck asserted, "a movement through an export organization to send the price of the metal , up to three or four times production costs," and to "peg the price there," which performance "brought on the present deplorable condition of the American copper industry.' Mr. Bragg professed ignorance as to these points. 'And this National City Com pany, when it saw the market slip ping," Chairman Norbeck followed up, "recommended that their customers buy it around $140 a share?" I dont know that, Bragg said. "What price is the stock now?" Chairman Norbeck asked. Smith Takes Stand "About 5." said the witness, and with the response won his temporary release, Mr. Smith taking his place. as a broker, Mr. smith said, he had been a specialist on the floor dealing with V. 8. Realty and Tide water associates, operating on his own account, however, as a chief occupation. He fenced with Mr. Gray as to whether he had been classified in current reports as "one of the biggest bear riders." "I don t know what that expression means," he said. "No one has ever called me that to my face, though I've heard some things." He declared during an exchange with Senator Couzens that he "didn't kec? books" as to his personal transactions, but did have records which he would gladly furnish. A four or five-handed discussion ensued, as Mr. Gray sought to have Mr. Smith describe and differentiate between a pool in Stockv Exchange affairs, and a "syndicate." "A pool exists when you undertake with others to subscribe to a legal document obligating yourself to take a certain percentage of stock bought or sold," Mr. Smith rejoined, "whereas in a syndicate you merely agree to buy stock on a Joint account with others in an equal amount." Clash on Meaning of Foot "What you've described as a pool," Mr. Gray insisted, "is a group of men who have gotten together for the purpose or illegally operating on the up-side or the down -side." "I think the attorney ought to define what he means by illegal or improper," Senator Couzens remonstrated, "so the witness can answer." "I don't mean that the contract is is illegal or improper," Mr. Gray explained, "but that the regular pool purpose is to co-operate with the specialist on the floor of the Exchange who gives to that pool inside information as to a particular stock." "I have never heard of that being done," Mr. Smith protested. "You've never known the specialist to show pools the information as to buying and selling orders on his books? Mr. Gray demanded. 'I never did, Mr. Smith re sponded. You d concede that sucn a prac tice was dishonest?" Senator Glass intervened. I don't know, Senator," Mr. Smith emurred. "I concede you could go to a specialist and ask what kind of a bid he had on 1000 or 500 shares of a stock." "The fellow whod do that would pick a pocket," the Virginian drawled, and Mr. Smith commented that he'd "let it pass." Denies Meehan Was in Pool "But take the Radio pool." Gry ent on. "Meehan, the Exchange specialist, was a member." Mr. Meehan nas never been a member of any pool," Smith rejoined. The pool account has always been in his wife's name." There was a moment of silence, and then Mr. Gray returned to the attack, saying "That is merely a mea sure for evasion and concealment." "No, I've done the same thing, Mr. Smith 'replied, "for the same reason. There is a rule of the Exchange that you can't be a broker and principal at the same time." Mr. Gray insisted mat "ine use oi wife's name under such circum stances was merely subterfuge," and Mr. Smith dropped the point, to go on with a description of the Radio pool. The whole object or mis organ ization was to put the stock up fic titiously, wasn t it? Senator Glass asked. "I wouldn't say that," Smith coun tered. "It had a great deal of earn ing power at the time." i naware of Bear Raids "Do you know anything about bear raids?" Senator Duncan U. Fletcher, D., Fla.), put in. "Organizations of people seeking now to depress market prices." "No. I don t," Mr. Smith told him "What are all the reports on that subjectr something manufactured by the newspapers?" Senator Glass in quired. "I would think -so, replied Mr, jjjj THE RELIABLE it uvi u and

Clipped from
  1. The Philadelphia Inquirer,
  2. 24 Apr 1932, Sun,
  3. Page 17

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