Bear Hunt (Cont'd)

For a long time Congressman Fiorello ("Little Flower") La Guardia of New York had been quietly stuffing a Pandora's Box with woe for Wall Street. Last week the box, a big, brown trunk, was so full of woe that it required two men to lug it in to Senator Norbeck's bear-hungry Committee on Banking & Currency, still investigating the stockmarket (TIME, April 25 et seq.). When Congressman La Guardia opened the lid, out flew a flock of woes for Bulls, Bears and the financial press.

Scouting the precious testimony of President Whitney of the New York Stock Exchange that the public was to blame for its mad scramble to participate in the Coolidge Bull market, the burly little Representative from Manhattan charged that brokers and operators always retained a high pressure press agent to puff stocks selected for manipulation. From his trunk he fished out evidence furnished by one Arthur Newton Plummer, who had "handled" 61 stocks.

Senator Couzens: What do you mean "handled?"

Congressman La Guardia: Ballyhooed --rigged! This one man Plummer paid out $286,271 during the course of his operations. ... He is a very smart young man, a writer of high-powered stuff.

Given a stock, smart Pressagent Plummer would "proceed to convince these financial newsboys that he had a good story." Congressman La Guardia added: 'He's been telling about some of these things lately, and since then he has been a harassed man, under indictment." Asked to explain the indictment, Mr. La Guardia said genially: "Well, it seems that he started to write a book, The Great American Swindle, or so he tells me ... and he says that in order to obtain some of his facts he had to act like a criminal. He was trying to show that forged securities were put in circulation, and now he is under indictment for forging securities."

Before he was arrested last January Pressagent Plummer seldom slipped. A onetime reporter for the Wall Street Journal (two of whose feature writers he had subsequently "convinced"), he had published three "financial" journals, once set himself up as "The Institute of Economic Research." Handling the ballyhoo for a pool that was bulling Savage Arms in 1924, Pressagent Plummer succeeded in placing favorable stories "605 times in 228 newspapers with a circulation of 11,248.000 in 157 cities with a population of 32,399,000.

For his able puffing of Pure Oil stock in 1925, Pressagent Plummer received a letter from Oscar L. Gubelman, large-scale speculator in oil stocks and director of many a potent U. S. corporation, confirming "the arrangement for payment to you of $2,500 in cash for publicity work for one month ... an option on 500 shares of Pure Oil at 25, and 500 additional shares at 25 1/2, good for 30 days."

With his cash and profits, Fixer Plummer would pay off the "financial news boys." If they were ticklish about checks, he delivered cash through a payoff man! Payments ranged from $50 to $600.

Urged to reveal more recent corruption, Congressman La Guardia enthusiastically described the Indian Motocycle pool. Enlisting the aid of Manipulator Harry Content and Pressagent Plummer, Hansell & Co. assumed sponsorship for the stock late in 1929. Plummer shot stories of a 65% increase in orders to papers in Springfield, Mass, (home of Indian Motocycle Co.), which were picked up by the Boston News Bureau, copied by its affiliate, the Wall Street Journal. Activity of the stock increased, the price was jumped from $4 to $7.50 in the second week of January 1930. Then the directors of Indian Motocycle purchased the rights to a Diesel airplane engine (for 50,000 shares of stock) from a well-known British inventor, agreed to split profits with him. Plummer got the story in the London Daily Mail, distributed reprints to the U. S. press. Circulars and telegrams were sent out by persuasive Hansell & Co. By March the price of Indian Motocycle reached $17, then sank to $5.50 in June when Plummer, and presumably the pool, abandoned it. The inventor of the air plane motor (never produced) "visited America, disposed of his shares and returned to England, contented but disgusted." Last week Indian Motocycle sold for 63-c-.

Summarized Congressman La Guardia : ''Sordid as these facts may seem, I believe that the same sort of story could be told regarding every stock in which there was a pool." As to Bears, they did the same things, "only with the reverse English."

Hunters. To expedite the investigation, Chairman Peter Norbeck, a onetime South Dakota well-digger, last week organized a sub-committee of five. Besides himself, Senator Norbeck appointed Republicans Couzens and Townsend, Democrats Fletcher and Glass. Conspicuously omitted was President Hoover's good friend Senator Walcott of Connecticut, who started the bear hunt. Washington thought he had tried to soft-pedal the inquiry after trapping more Republicans than Democrats in bear's clothing. Four special investigators and an accounting firm were to be hired. Representative La Guardia's explosive testimony was the subcommittee's first move to broaden the hunt to include all stockmarket denizens, all equally vicious in the eyes of Well--Digger Norbeck.

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