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Bear Parade. Before the committee reviewing stand began to pass a parade of almost legendary figures—men whose names committeemen and the Wall-Street-conscious public had linked with million-dollar deals, but whose persons had hitherto been concealed in the abysses of Wall Street. Leading the parade was Matthew Chauncey Brush. In marked contrast to Mr. Whitney's quiet precision (which irritated Chairman Norbeck to the point of shouting: "You're hopeless!") was the bluff readiness-to-tell-all of Witness Brush. Mr. Brush greeted Counsel Gray (an old friend), blithely told how he started in Boston with "pretty skinny trading" ten years ago while he was president of American International Ship-Building Corp. In 1929 he was a big bull, did not become a bear until the next year. In 1929 he was 125,000 shares long of the market with a liquidation value of $15,000,000; since then he has been at times 125,000 shares short. He agreed that the Exchange statistics on short sales did not give an accurate picture of bear operations, since they did not include short sales covered the same day. He offered a sharp contradiction to Mr. Whitney's testimony (and to a major point in all Mr. Whitney's declarations in defense of the Exchange) by opining that short selling does temporarily depress the market, that short sales covered the same day do add to breaking prices.
Bear Brush vigorously opposed abolition of short selling. If no bears sold against foolish bidding or covered when there was foolish selling, he said, there would be "terrific swings" in the market. "The use of dummy names has advantages and disadvantages. If word got round that some bad actor was selling short, the market might fall out of bed." He said that pushing a stock up is as bad as pushing it down —"especially if it's done just at the close of day's market. The fellow out on Keokuk tells his brother over a stein of beer: 'See what Telephone or Steel did?' Next morning they rush in and buy some at the advanced price, and the fellow who closed the market up sells it to them.
"It's pathetic, the basis on which the average traders buy stock. They get a circular from Heinie & Kabooble, just over here from Greece two months,* telling them that XYZ is a great buy, and they all jump in. That's no exaggeration."
His own system is to buy and sell over long periods. He said he had never been on the Exchange floor, had been in a broker's office only three or four times. He takes his position, either long or short, and clings to it. "If a stock is a buy at 99 it's a buy at 100. I don't think my short position has any more effect on the market than a rabbit. Patriotism has no more to do with it than that inkwell." He said he was still holding one stock which he thought would sell ten points lower in the next six months, but "the man don't live who can tell what the market will do in the next six months."
His thick grey hair rumpled, his face twisted into a wry smile, Bear Brush announced: "I'm going to be shot when I get back to New York." Senator Brookhart: Have they got rackets like Al Capone up there? Mr. Brush: Al Capone is a piker compared to that racket.