Exchange Ouster

Gong. At 10:30 of a busy morning on the New York Stock Exchange a gong clanged. All operations were suspended. Busy traders left their posts. Telephone clerks removed the receivers of their instruments from the hooks. Telegraph operators stopped their ticking. All looked up at the rostrum. On the little balcony appeared the cold, scholarly figure of Stock Exchange President Edward Henry Harriman Simmons. Amid a hush he announced that Member Herman W. Booth was expelled from the roster of the Exchange for "conduct inconsistent with just and equitable principles of trade." It was the first expulsion since July, 1925.š Charges. Herman W. Booth was not in Manhattan on the day of his expulsion. He hardly ever appeared on the trading floor of the New York Stock Exchange, doing most of his buying through other brokers. Some weeks ago the Exchange's Committee on Business Conduct asked for his books and did not get them. An inquiry showed that Mr. Booth kept no books. The Committee could not find what customers he had, if any; nor could they learn what his assets & liabilities were. Little or nothing could be found out about him--not even what the Middle "W." in his name stood for. The New York telephone directory lists him as a lawyer. Other directories do not list him. Seat. Herman W. Booth bought his seat (on which he hardly ever sat) on April 23, 1914. At that time memberships on the Exchange were selling at from $34,000 to $55,000. When he was expelled, his seat was immediately offered for sale by the Exchange at the last listed sale price, which was the record $235,000. Memberships are so rarely offered for sale even at this figure, that it was immediately bought by William Billings Hewitt, Wall Street Broker.

Arbiter. Prospective members of the Exchange must present innumerable personal & business & bank references. They must sign the constitution & by-laws of the Exchange. In this document they promise to show their books to the Committee on Business Conduct at regular intervals, and also at any other times. The Exchange becomes the absolute arbiter of their business life. According to its bylaws, it can even hold the money it receives from the sale of the seat of an expelled member and pay it on claims of other members.

This will hardly happen to Herman W. Booth, for apparently he had no customers.

By keeping his seat for 13 years and doing little or nothing with it, Mr. Booth profited by at least $180,000.

šThere have been less than a score of ousters in the past seven years.