Harrisburg Telegraph from Harrisburg, Pennsylvania • Page 2

WEDNESDAY EVENING MARCH 9, 1938 Wall Street's Old Guard Upset by Financial Crash HARRISBURG TELEGRAPH WHITNEY COLLAPSE IS HARD BLOW FOR STOCK EXCHANGE Prestige of Broker Brings Surprise When His Financial Condition Is Investigated New York March 9, Wall Street was ill a nurry of conjecture today over the possible impetus to Stock Exchange reorganization and reform which may result from the sensational failure of Richard Whitney and Company. While eagerly awaiting revelations as to the financial transactions that resulted in yesterday's announcement of suspension and insolvency of the brokerage house headed by the Exchange's former president, some Wall streeters saw deep significance in the possible blow to the prestige of the Stock Exchange's "old guard." The entire exchange membership, it was pointed out, is now voting on proposed amendments to its constitution, which if approved, would bring an entire new board of governors into office next May. Whitney became president of the Exchange in 1930 and was ousted in 1935 by an "insurgent" group which supported Charles R. Gay, present president. The insurgents opposed Whitney as representing the "old guard" which they charged perpetuated itself in control year after year, operated the Exchange as a private club, and had not been alert to changes in public and political temper toward Wall Street after 1929.

Some members of the "insurgent" group have complained, however, that the Gay administration has represented little alteration in control, since it found many of the "old guard" still in key positions in the board of governors. The Whitney suspension gave Wall Street a shock such as it has not received in years. Never in stock exchange history has a president or former president been suspended. Some Wall streeters said it was necessary to go back to the Grant and Ward failure in 1884, or possibly to the Jay Cooke failure in 1873, to find a name so prominent involved in a stock exchange member insolvency. That the market received the news calmly, it was explained, was due to the fact that the name of Richard Whitney was prominent more for position and than for great wealth or financial power.

While a brother of a Mor gan partner, and often executing orders for the House of Morgan, Whitney, it was said, has been primarily a broker rather than a financier, has executed orders for others rather than being a large holder in leading corporations. Adding to the sensational aspects was the formal announcement of the Stock Exchange that the notice of insolvency from the firm came after the Exchange's committee on business conduct had "discovered evidence of conduct apparently contrary to just and equitable principles of trade," and had "presented to a special meeting of the governing committee charges and specifications." The committee set March 17 for a hearing on the charges. At the same time, the State Attorney General's office began an investigation of the firm to learn whether there had been any violation of the Martin Act covering security dealings, and the Securities Exchange Commission was busy going over the firm's records. In Federal Court, where the Whitney firm filed voluntary petition in bankruptcy, ten days were permitted for filing detailed schedules of assets and Labilities. March 17, the date set for the Stock Exchange's hearing on its own committee's rha the Whitney firm, is the final date lor balloting on the proposed constitutional amendments.

It has been widely believed in Wall Street that the amendments would be approved. The extent of change in control, some explain, will depend upon the selections to the new board of governors. The nominating committee is understood to be already at work. Some of the "insurgent" group have warned that if the committee's selections do not satisfy them as sufficiently representative, there will be an opposition slate. The new plan would give the Exchange a board of thirty two governors, in contrast to the present fifty.

It would be made up of a salaried, full time president, in place of the present member president serving without salary; a chairman, for which position Gay has been frequently mentioned; fifteen members of the Exchange representing various interests In the membership; six partners in firms doing a commission business with the public; six partners In firms having their principal offices outside of New York City, and three representatives of the public. Other reforms and changes in Exchange administration and procedure have been actively studied and discussed, both by members and by the S.E.C. Some members have agitated for some form of associate memberships for banks and Investment bankers. The S.E.C. has for some time been itudylng the possibility of segregation of brokers doing a commission business for the cub.

lie, from those trading for their own account. LETTER DELAYED NINE YEARS YORK, March 9. Mailed from this city nine yean ago a letter Assistant Postmaster Ivan W. Parr of the local post office addressed to his son, Cadet Ivan W. Parr, at West Point, N.

has just been delivered to the addressee at Fort Bennington, where he now is stationed as a first lieutenant of infantry. The assistant postmaster's letter to his son was mailed at York in August, 1929. AIR RAIDS STRIKE TERROR TO CITIES Insurgents Hope to Regain Prestige Lost Caused by Sink ing of Cruiser in Battle Hendaye, France, at the Spanish Frontier, March 9, Terror mounted in Eastern Spain today under renewed air raids by Insurgent and Government bombers. Insurgents strove to avenge loss of the Cruiser Baleares in a naval engagement in the Mediterranean Sunday and the consequent blow to their blockade of government ports. The Government aimed at breaking up troop concentrations.

Government dispatches said fleets of bombers were ranging the Ara gon front where increasing Insurgent activity was noted yesterday, and were attacking troop centers, artillery batteries and truck trains, Insurgents bombed the outskirts of Barcelona, after being deflected from an attack on the center of the city by anti aircraft fire and powerful new searchlight bat teries. They also bombed suburbs of Tarragona to the south. Insurgent flyers were reported driven from Cartagena, government naval base, by anti aircraft batteries. The Insurgents sent out trawlers and merchant ships equipped with deck guns to bolster their naval efforts to prevent war supplies reaching government ports on the Mediterranean. ATTORNEY GIVES 800 LAW BOOKS TO SCHOOL Saint Francis College Receives Volumes From Johnstown Barrister, Alumnus of School The nucleus of a law division became a permanent addition to ihe general library at Saint Francis College, Loretto, with the presentation of more than 800 volumes of law by Attorney W.

A. McGuire, Johnstown. The volumes of law, including valuable and limited editions, were presented early this week by the Johnstown barrister, according to Librarians Irwin P. Dunegan, A. B.

L. and the Rev. Ambrose Burke, T. O. A.

M. Attorney McGuire is an alumnus of Saint Francis, graduating from the School of Pre Law in 1892. His donation, the largest received, comprised the greater part of rfis personal library. Smart, flattering gabardine woven by Foretmann, tailored with beauty in Red CroMSboM. One of the season stylo highlights and a tremendous value at tba price.

Now only $6.50. Me Now Only 204 Walnut Stmt HARtlSBt BO I BUT SHOE ITOBt umm 650 QModneu BRITISH PREPARE FOR WAR DESPITE TALK FOR PEACE Empire's Gvil Aviation Setup Reviewed Closely in Regard to War Strength London, March 9, (JP). Britain's thoroughgoing rearmament pro gram enfolded civil aviation today while preparations for two handed o) 0) minister, and the British foreign minister, Lord Halifax. The British ambassador in Rome, Earl of Perth, and Italy's foreign minister, Count Galeazzo Ciano, were believed ready to square away Thursday or Friday. An initial conference in Rome yesterday was devoted to preliminaries.

Anti Nazi demonstrators last night anticipated these conversations, which Prime Minister Chamberlain undertook as a grand effort at a general European set tlement with Europe's dictators, even at the price of a break with Anthony Eden, his former foreign minister. Carrying placards lettered "keep out Herr Ribbentrop" and "get out, Herr Ribbentrop," more than 300 marchers tied up traffic in Piccadilly Circus. Ignoring the clinced fist (Com munist) salute, fifty police reserves waded into the crowd, de stroying banners. The government approved virtually the entire report of the Cadman committee and agreed that "the military aspects of avia tion cannot be separated funda mentally from its civil aspect." One accepted recommendation was for an increase from $7,500, 000 to $15,000,000 of the air trans port subsidy for expansion of British airlines, particularly in the West Indies and South America YU HAW MLE YISAMi AMP IL Hfoece surly A7foo0e tHfoe shke is wide tfoini (sots gdw fr rodsbffiinn) pdtaes A few days ago nobody had ever heard of National Used Car Exchange Week. Today the news is in hundreds of thousands of homes throughout the country, and many excited "family buying councils' are under way.

No wonder! The American public has never had such an opportunity to OWN A BETTER CAR for a remarkably small investment What's your first question? Can I afford to buy now? If you've been putting up with an old unreliable car, you can't afford NOT to buy now! Spring is just around the corner auto mobile dealers co operating in this great nation wide sale have an unusually fine selection of good used cars and prices are far below those of several months ago. Look at the classified pages of this paper for SPONSORED DY peace dickers with Germany and Italy marked time. The Lord Cadman committee in Parliament published its report viewing, "with extreme disquiet the position" of civil aviation in Britain. The report recommended a government subsidy for air transport companies, reformation of Imperial Airways and close cooperation between military and commercial aviation. Appointment of an under sec retary of state for air to direct civil aviation was suggested.

On diplomacy's stage, the agenda was arranged for Thurs day's conference between Joachim Von Ribbentrop, German foreign proof. Visit the used car lot or showroom of any authorized car dealer displaying this sign and see the exceptional bargains on display. Many are 1937, '36 and '35 models backed by the finest of dealer guarantees. All have thousands of miles of first class unused trans portation in them. And the "first class" transportation of these modern cars represents satisfaction which the owners of older cars can hardly imagine.

Beautiful, modern styling a more comfort able ride more room for you and your luggage finer, more powerful engines better gas mileage better brakes bigger tires dozens of improvements introduced since your old car was built. Stack up your old car with its prospect of repair bills and decreasing trade in value against the joy of owning a modern car like SEIZE PUNCH BOARDS Hold Millersburg Poolroom Pro prietor and Lenkersville Gas Station Man Two upper Dauphin County merchants arrested Monday by State Motor Police in raids were held under $300 bail each for court on charges of maintaining gambling devices at hearings yesterday morning before Alderman Joseph K. Armstrong. The magistrate said they were R. B.

Mc Bride, Market street, Millersburg, pool room proprietor, and Lloyd Meek, Lenkersville gasoline service station operator. Police reported three punch ES 5L boards and a slot machine were confiscated at the McBride establishment, a cigaret machine and a slot machine at the gasoline station. DIES DIGGING GRAVE Allentown, March 9 UP). Os ville D. Semmel, 76, Friedens, Lehigh county, sexton of Friedens Cemetery, was found dead yesterday beside a grave he had prepared for the burial of another.

El wood C. Heintzelman, funeral director, found the body. Dr. Harry Kern, Slatington, said Semmel died following a heart attack. WHIL PAY SEE ANY CAR DEALER DISPLAYING THIS SIGN this.

Now's the time to make the switch, while you have more to trade and less to pay. Your present car may cover the down payment balance on easy terms. If you have no car to trade, you can still take advantage of the low down payments and easy terms during this sale. Buy early while the selection is the widest and the best. BRING III YOUR OLD CAR DRIVE OUT A BETTER CAR EASY TERMS THE AUTOMOBILE DEALERS AND MANUFACTURERS OF THE UNITED STATED.