The CHAIRMAN. They had a very full hearing before those conclusions were reached, and that evidence is now before this committee in three volumes.

Senator WEEKS. I understand. I am perfectly familiar with not only the evidence but the report, and in my judgment not only was much of the evidence erroneous to some degree, but much of the report based on that testimony would be changed if additional evidence were submitted to the committee. I suggest that the proponents of this legislation, present their case, or if it is desirable, to take up the Pujo report, that the representatives of the stock exchanges have an opportunity to submit such supplemental evidence as they may have on that report before taking up a bill which is based on it.

Senator HITCHCOCK. Mr. Chairman, before that matter is decided, I would like to learn how our committee gets its jurisdiction of this bill.

The CHAIRMAN. It gets its jurisdiction by order of the Senate, January 12, 1914.

Senator HITCHCOCK. That was a pro forma matter, inasmuch as the chairman of the committee who introduced the bill requested that it go to this committee. I must confess I have not read the bill, but as I glance through it I can see nothing with reference to either banking or currency. It relates to either interstate commerce or post offices, and the administration of the post offices.

The CHAIRMAN. The effect upon the banking of the country has been very great.

Senator SHAFROTH. This matter is one that would have to be presented to the Senate for determining a motion to refer it to another committee. Until it is moved and discussed in the Senate, of course the reference should stand and would stand.

The CHAIRMAN. The Senate referred it to this committee.

Senator NELSON. But, Mr. Chairman, there is one thing I would like to suggest, leaving the suggestions of the Senator from Nebraska for the moment. I would like to have an explanation as to the scope and purposes of this bill.

Senator SHAFROTH. Let us read the bill right now.

Senator NELSON. I would like to have those who are at the back of this bill, who believe in it, explain the scope and purpose of it, so we may get a full understanding of it.

The CHAIRMAN. The scope and purposes are declared right in the title of the bill:

To prevent the use of the mails and of the telegraph and telephone in furtherance of fraudulent and harmful transactions on stock exchanges.

Senator NELSON. But if you go on and read, you will see it is not limited to that.

The CHAIRMAN. The Pujo report, of course, dealt with the concen/tration and control of credits in the United States, and the control of credits in the United States, which has operated to control the great industries and incidentally to control the operation of the great banks and trust companies of the United States, has a very direct important relation to the banking of the country.

Senator NELSON. Mr. Untermyer is here, and I suppose he is familiar with the bill and could explain it to us, and how it will operate.

The CHAIRMAN. The committee will be pleased to hear from Mr. Untermyer first, and have him briefly explain this bill.

Senator NELSON. It seems to me that is the best plan.

Senator HITCHCOCK. I Would like to have the bill read first.

The CHAIRMAN. Senator Shafroth, would you be good enough to read the bill?

(Senator Shafroth read aloud the bill under discussion.)

The CHAIRMAN. Mr. Untermyer, will you explain briefly what has been done, and the purposes of this bill?

STATEMENT OF SAMUEL UNTERMYER, OF NEW YORK CITY.

Mr. UNTERMYER. I shall be glad to do so, Mr. Chairman and gentlemen, although I assumed that those who were opposed to the bill would state the reasons for their opposition, in view of the fact that this is substantially the same bill that has been recommended by the subcommittee of the Committee on Banking and Currency of the House at the last day of the last session. I would like to say, before answering the chairman's suggestion as to the statement made by Senator Weeks, that I imagine he must have been misinformed with respect to the proceedings of the Pujo committee. Perhaps he may have gotten his false information through the press reports of the transactions of the Pujo committee. There was never a more elaborate press organization gotten up in the history of the country than that which was centered upon that inquiry. Everything done by that committee was misrepresented, everybody connected with the committee was bitterly assailed, and it has taken some time for the true facts connected with that investigation to be appreciated by the public generally.

To illustrate, if I may just for a moment by way of preliminary statement: The feeling was so bitter, engendered by those who were affected by the investigation, that it went to the extent of assaults upon the floor of the House upon those who were connected with the investigation, and inspired newspaper editorials with no foundation in fact were put in the Congressional Record affecting them. Among other things, statements were made by Members of Congress on the floor to the effect that the investigation had cost $250,000. It cost something less than $60,000. The statement was made also that as counsel for the committee I had been paid the extravagant sum of $15,000 for my services to the committee, which had extended almost continuously over a period of eight months, when in point of fact I had spent about $23,000 of my own money in connection with that investigation.

Senator HITCHCOCK. In what way?

Mr. UNTERMYER. I spent about $16.000 in distributing or having distributed 155,000 copies of the report of the committee, when it became impossible to secure a resolution from the House of Representatives for distribution of a sufficient number of copies of that report, in order to inform the public. I spent large sums of money in expert accountants' fees, in preparing statements, and in other ways, for which I did not feel disposed to put in vouchers.

Senator NELSON. Did you receive no pay from the committee?
Mr. UNTERMYER. We received $15,000 from the committee.
Senator NELSON. Whom do you mean by we"?

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Mr. UNTERMYER. I, on behalf of my firm, received $15,000 for eight months' services to the committee, and I personally spent about $23,000. It is unnecessary for me to state that part of that $15,000 I personally received; but I do state that I personally spent $23,000. I am only instancing that for the purpose of showing the extent to which the activities of those connected with the investigation were misrepresented.

Senator NELSON. Do I understand you received $15,000 for your services and then $23,000 for expenses?

Mr. UNTERMYER. No, sir; I spent $23,000 of my own money, which I did not get back.

Senator NELSON. Oh, I see.

Mr. UNTERMYER. And which I did not and do not care to get back. I was glad to be able to perform this important public service, but protest under further misrepresentation of the facts and of my motives. It is time the facts were known.

Senator HITCHCOCK. This $23,000 was for distribution of the Pujo report?

Mr. UNTERMYER. Yes, sir.

Senator HITCHCOCK. Did not the House provide for the publication of the report?

Mr. UNTERMYER. The House provided by one resolution for the printing of 5,000 copies, and by another resolution for the printing of 10,000 more copies; but I understand there are applications for thousands of copies from all parts of the country, applications on file here, with which there has been no means of complying, and that the copies could not be obtained. I had distributed these 155,000 copies, which I had printed privately at my own expense; but, notwithstanding that further distribution, the demand was so great from all parts of the country that I am told there are on file here with the Committee on Banking and Currency requests from every section of the country for further copies of the report and that the supply has been exhausted. The report is out of print and has been for many months. Senator HITCHCOCK. Was there no effort made in the House to have it reprinted?

Mr. UNTERMYER. I do not know. I think there was an effort made, but nothing came of it. I think an effort was made in the Senate also. I think the Senate did put through one resolution for printing 5,000 or 10,000 copies, but the demands were so great they were almost immediately exhausted by the applications on file. Mr. Chairman, I think Senator Weeks has reflected upon the sense of fairness of the Pujo committee. I am sure he did not intend to do so, but I think his remarks may be construed to reflect upon the fairness with which that investigation was conducted. I do not think it is necessary or becoming or appropriate in me to stand here to defend the action of a constituted committee of the House of Representatives as to its fairness in conducting an investigation. I do not believe this committee is going to assume that the committee of the House was unfair in its action.

Senator NELSON. Mr. Untermyer, will you pardon me? I do not want to embarrass you, but we are all very busy. I have not the time to read through all of that Pujo committee report now. I would be very glad if you would go on and briefly state to the committee the evils of the stock exchange.

Mr. UNTERMYER. I will in a moment, Senator Nelson. I would like to complete this statement I am about making.

So far from there being anything unfair or one-sided about the investigation, with a few exceptions, the witnesses who were called in connection with the stock exchange part of the investigation, which was only one of many branches of the inquiry-there are 27 distinct recommendations, of which this is only one-were members or officials of the exchange. The exchange was invited to name those of its officers and members whom it believed best able to enlighten the committee, and the witnesses whom they nominated were called by the committee and fully examined. There was no attempt to discredit the operations of the exchange from out of the mouths of soreheads, muckrakers, or enemies. Whatever evidence there is here before the committee is mainly evidence that came from out the mouths of the officials of the exchange and evidence that is furnished mainly by statistics and documents. No question that it was sought to put by any member or by counsel for the exchange to a witness on the stand remained unput. Every question which anybody connected with the exchange wanted to put to a witness was put. Counsel for the exchange

Mr. MILBURN (interposing). We were not allowed to put any questions.

Mr. UNTERMYER. The questions were put through counsel for the committee. It would have been a most unseemly performance to have allowed every one of the one hundred or more witnesses to have separate counsel and to have had an examination of each witness on the part of separate counsel. The investigation would have been endless. Our time was very limited. As it was, the inquiry was unfinished when the session closed. The report was hurriedly prepared and put in on the last day of the term of Congress. No such procedure as it is now suggested should have been followed has ever been known, so far as I ever heard, in any congressional inquiry, and no such procedure would have been within the range of possibilities. Counsel and the witnesses were invited to put, through the counsel for the committee, any questions they wanted put; not only that, but they were invited to read over their testimony and make any corrections and to add anything they chose by way of explanation; and, availing themselves of that permission, the principal witnesses did that. One of them, Mr. Sturgis, came in the following morning and read a statement descanting in glowing terms upon the virtues of the stock exchange, which you will find in the record. Every witness had the fullest opportunity of explanation or of having put any questions that were sought to be asked. Counsel for the exchange was also afforded the opportunity of submitting to the committee a brief covering every question that was discussed before the committee. Availing himself of that privilege, he furnished the committee a printed brief covering these questions, that brief comprising 61 or 62 printed pages.

I resent the suggestion that there was anything unfair or partisan about the conduct of that investigation. There was never an investigation conducted in which the lines of legal evidence were so rigidly adhered to as in that inquiry; and, gentlemen of the committee, you will find, if you will look over that record, that there is nowhere any

thing in the way of hearsay evidence; that none of the precedents of loose testimony, involving people upon secondary evidence, were permitted in the inquiry. You will find a record there which, so far as concerns its adherence to legal lines, will stand muster in a court of law upon review by an appellate court, and that is saying a great deal, I think, for a congressional inquiry. It marks a new departure in proceedings of this character.

But for the fact that the chairman of that committee is no longer in Congress, and that the presentation of this bill or the championing of this bill may be fairly regarded as within the legitimate scope of counsel who conducted the inquiry and was paid therefor, I should not be here to defend and champion the bill. I am here because I believe it is a part of the duty that was within the range of that committee, and I feel that, so far as concerns any and all of the recommendations of that committee, I ought, in justice to the retainer that I received, to continue the work until it is completed, especially in view of the fact that you have a very voluminous record here of three or four volumes of testimony, a report covering hundreds of pages, and very complicated statistics, with which it would be difficult for any member of the committee within a reasonable time to familiarize himself.

It seems to have been assumed by those who are opposed to this bill-and it is a very powerful factor that is so opposed, including not only the stock exchange, but all its financial ramifications-that this proposed legislation comes here as an original question without authority or support. I think there is sufficient authority for a bill of this kind when it comes recommended not only by the unanimous Democratic membership of that committee, but by the support and approval of three of the four Republican members. Before going into detail on the question I would like to call your attention briefly to these quotations from the report, the first being from the majority report.

Senator POMERENE. From what report are you about to read?

Mr. UNTERMYER. From page 115 of the report of the Pujo committee:

The general public, which has grown to look upon the exchange with distrust because of the practices that have been permitted, will be given new confidence in it when it is under legal supervision.

Notwithstanding these facts, it contends that it should be permitted to continue its voluntary organization with the privileges and freedom of action of a private club and should not be made subject to legislative or judicial control or supervision, and that it is not amenable to Federal regulation in its use of the mails and of the telegraph and telephone in interstate commerce and in the dealings of its members with foreign countries.

To this contention your committee is unable to agree. It is incongruous that such an institution wielding such power and equipped to perform such useful and important functions in our economic system should be uncontrolled by law. On the other hand, your committee believes that incorporation and regulation would banish from the exchange transactions which now disgrace it, bringing in their place a greater volume of business of an investment and otherwise legitimate character, and marking the dawn of a new era of prosperity for its members and of usefulness to the public.

From page 116 of the same report I read as follows:

In other words, the facilities of the New York Stock Exchange are employed largely for transactions producing moral and economic waste and corruption; and it is fair to assume that in lesser and varying degree this is true or may