Senator SMITH.
In the item which you read just preceding that, I did not catch the expression, "Women and children had not yet been taken off, though lifeboats were ready in case of emergency." Was that in there?
Mr. FARRELL.
That was not on the ticker tape in that message.
Senator SMITH.
It is in your original memorandum.
Mr. FARRELL.
It may be on the bulletin.
Senator SMITH.
It is in your original memorandum.
Mr. FARRELL.
I was looking at the wrong one, I see. Yes; it is here (indicating).
At 10.55, or thereabouts, on April 15; we published the following:
A wireless message to White Star Line office stated that the Virginian is now alongside the Titanic.
That was received from the Laffan News Bureau.
At 11.25 a.m., or thereabouts, on April 15, we published the following:
A. S. Franklin, of International Mercantile Marine, says:
"We can not state too strongly our belief that the ship is unsinkable and passengers perfectly safe. The ship is reported to have gone down several feet by the head. This may be due from water filling forward compartments, and ship may go down many feet by the head and still keep afloat for an indefinite period."
Interruption of wireless communication with the ship, according to company officials, does not indicate danger.
That was received from Mr. Franklin by Mr. Byrne and Mr. Smallwood, two of our reporters.
At 11.15 a.m., on April 15, we published the following:
LONDON.
Information given out here states Titanic carried about $5,000,000 in bonds and diamonds.
That was received from the Laffan News Service.
At 11.25 a.m., on April 15, we published the following:
Dispatch received at White Star offices from Capt. Haddock, of steamship Olympic, says that both the Parisian and Carpathia are in attendance on the Titanic. Carpathia has taken off 20 boatloads of passengers. The Baltic is expected on the scene shortly.
That was received from Mr. Franklin by Mr. Byrne, one of our reporters, and substantially the same message at practically the same hour was received from Mr. Bottomley, an official of the Marconi Co., by Mr. Smallwood, one of our reporters.
At 12.12 p.m., or thereabouts, on April 15, we published the following:
The Sandy Hook marine operator received the following wireless on his machine at 11.36 o'clock this morning:
"Wireless says Titanic is under way and proceeding to New York."
That came from the Laffan News Bureau.
At 3.01 p.m., April 15, we published the following:
P. A. S. Franklin vice president International Mercantile Marine. says arrangements have been made with New Haven road to send special train to Halifax to meet passengers of the Titanic. Train will consist of 28 sleepers, 2 diners, and coaches sufficient for 710 people.
That was received by Mr. Byrne, one of our reporters, from Mr. Franklin.
Senator SMITH.
That was at what hour?
Mr. FARRELL.
One minute past 3 o'clock p.m.
Senator SMITH.
On Monday?
Mr. FARRELL.
April 15; yes.
Senator SMITH.
You say this information came from Mr. Franklin?
Mr. FARRELL.
Yes, sir.
Senator SMITH.
Directly to one of your reporters?
Mr. FARRELL.
Yes.
Senator SMITH.
That would seem to indicate that he had at that time absolute information as to the loss of the Titanic and the survival of only about 700 passengers from the ship's people, passengers and crew?
Mr. FARRELL.
Taken at the face value, the statement would seem to indicate that, but I will explain to you later what the White Star people explained to me the following day.
Senator SMITH.
Let us get this just right. That is a direct statement from Mr. Franklin, on Monday afternoon following the accident, arrangements had been made for the survivors, indicating that he had some information -
Mr. FARRELL.
I would not want you to put that in my mouth, Senator, because -
Senator SMITH.
No; I am just construing this, by way of asking you a question.
That would indicate that he had some information upon which he based the necessity for caring for about 700 people. What did you publish after that?
Mr. FARRELL.
About 3.15 p.m. or thereabouts, on April 15, we published the following:
CANSO, NOVA SCOTIA
At 2 o'clock the Titanic, having transferred her passengers to the Parisian and Carpathia, was being towed to Halifax by the Virginian.
That came to us from the Laffan News Bureau.
Senator SMITH.
Of course, Mr. Farrell, you note the inconsistency between that news item and the one that just precedes it?
Mr. FARRELL.
Yes.
Senator SMITH.
If her passengers had been transferred, as that last item would seem to suggest, there would be two thousand and odd passengers, while the only provision in the former item was for 700 survivors. Between the time of the publication of that information from Mr. Franklin and the publication of the last item to which you have referred, did you have any personal talk with Mr. Franklin?
Mr. FARRELL.
I did not.
Senator SMITH.
What was the time of that item?
Mr. FARRELL.
3.15 o'clock.
Senator SMITH.
And that came from the Laffan News Bureau?
Mr. FARRELL.
Yes. That is all we published in our news ticker on April 15 concerning this accident.
Senator SMITH.
Do your bulletins for that day and the days following up to the time of the arrival of the Carpathia, contain substantially the same information?
Mr. FARRELL.
The bulletins contain substantially the same information.
Senator SMITH.
As that contained on the ticker tape?
Mr. FARRELL.
As that contained on the ticker tape; yes.
Senator SMITH.
Of Monday?
Mr. FARRELL.
Yes.
Senator SMITH.
Do you call that the ticker tape?
Mr. FARRELL.
Yes.
Senator SMITH.
That is the ticker tape of Monday?
Mr. FARRELL.
Yes.
Senator SMITH.
And the same would be reflected in the bulletins of the succeeding days?
Mr. FARRELL.
Only the story was entirely changed on the succeeding days when we got it.
Senator SMITH.
Have you got the ticker tape for Tuesday?
Mr. FARRELL.
I have not the ticker tape for Tuesday, Wednesday, or Thursday. It was only by accident I happened to find this, because we ordinarily do not save these at all. I just happened to be able to get this.
Senator SMITH.
Was it you who talked to me over the telephone the other day from your office in New York?
Mr. FARRELL.
Yes; I believe I did.
Senator SMITH.
I particularly wanted the tape, if it could be preserved.
Mr. FARRELL.
Yes; I know, but it had not been preserved.
Senator SMITH.
You have made diligent search for it?
Mr. FARRELL.
Yes; we have made search for it, all over.
Senator SMITH.
You have not been able to find it?
Mr. FARRELL.
We just happened, by accident more than anything else, to find this of April 15. Oh, I beg your pardon. I am wrong about it. I was thinking of Thursday. I have the tape for Tuesday and Wednesday. It was Thursday I could not find.
Senator SMITH.
Let us see what you have for Tuesday and Wednesday. Had we better go through the bulletins for that day, or have you compared them?
Mr. FARRELL.
It is substantially the same stuff. All the important stuff appeared on the ticker also.
Senator SMITH.
Can you let me see the bulletins of Monday?
Mr. FARRELL.
Yes. Of course, we have the full list, and I picked out the particular stuff pertaining to the Titanic.
Senator SMITH.
Let me ask what the effect was, upon the stock of the International Mercantile Marine Co., of the information published in the Wall Street Journal on Monday?
Mr. FARRELL.
As I remember it, the stock declined about two points. I think we have a record of it in the bulletins here. I am quite sure we have.
Senator SMITH.
If you can give that accurately, I would like to have it.
Mr. FARRELL.
I know that from time to time during the day we published it. Here it is: International Mercantile Marine; common 2,100 shares were dealt in; opened at $6 a share. The high was $6; the low was $5.50; the close was $6.
Senator SMITH.
That was on Monday?
Mr. FARRELL.
Yes; there was no net change.
The preferred opened at 20, rose to 23 1/8, and closed at 23 1/8. That was off seven-eighths for the day, net.
Senator SMITH.
What time does that indicate that the exchange opened?
Mr. FARRELL.
Ten o'clock. The movements occurred between 10 a.m. and 3 p m., so that there was that substantial change in the market value.
Senator SMITH.
I take it from the publication which you manage that you are somewhat familiar with the movements of stocks.
Mr. FARRELL.
Yes, sir.
Senator SMITH.
What, in your opinion, was the effect upon the market value of the stock, both preferred and common, of the International Mercantile Marine Co., of the reports printed in the Wall Street Journal and upon your bulletins and ticker tape that day, giving assurance of the safety of the Titanic?
Mr. FARRELL.
There was, you might say, virtually no market influence, because the trading was very light, and, as I just pointed out, the net change in the trades for the day on the preferred was only seven-eighths down and there was no net change for the common. At one time the preferred was down about three points. It was down about three points from the previous day's close and then recovered. The transactions were comparatively light and it really seemed to have very little market.
Senator SMITH.
Suppose you had printed on that day the information that was obtained that day by Mr. Franklin, of the White Star Co., over the telephone from Montreal at 2.30 o'clock Monday morning, indicating that the Titanic was sinking, and had not bolstered up the unfavorable news by the optimistic reports which your ticker and bulletin indicate, what, in your opinion, would hare been effect?
Mr. FARRELL.
Probably about the same, because after the full extent of the case became known the Mercantile Marine market price changed very little.
Senator SMITH.
Of course it was filtered out so slowly that the actual loss of the Titanic was not fully known to the public for two days -
Mr. FARRELL.
It was known the next day, Tuesday.
Senator SMITH. (continuing)
After the accident occurred?
Mr. FARRELL.
Yes.
Senator SMITH.
That would have a tendency to strengthen the market somewhat, would it not?
Mr. FARRELL.
It might have. A sudden and unexpected shock sometimes has more effect on the market than the same shock for which the market has been prepared.
Senator SMITH.
But notwithstanding the belated news, the preferred stock of the International Mercantile Marine Co. went off on Monday about seven points?
Mr. FARRELL.
No.
Senator SMITH.
How much?
Mr. FARRELL.
I think the maximum decline was about three points, all of which, except seven-eighths, had been recovered before the close, as I recall it. Maybe I can give that exactly here.
Senator SMITH.
What I am seeking to show, which of course you can see very readily, is the effect of these false reports that were being constantly sent broadcast, through your paper and your ticker and your bulletins - and not alone by you -
Mr. FARRELL.
And by others.
Senator SMITH. (continuing)
But also by others - on the market for this company's shares. I would like to have you help me as much as you can with any information you have there.
Mr. FARRELL.
The comparatively small trading in the shares showed clearly enough that there was no suppression of news for market purposes, I should judge.
Senator SMITH.
Although it might have operated to affect the market that way? That might, however, have been the effect of the course pursued, whether intentional or otherwise?
Mr. FARRELL.
That might have been the effect on a more active stock than International Mercantile Marine, and one more widely distributed. But, you understand, Mercantile Marine is a very inactive stock.
Senator SMITH.
It is closely held?
Mr. FARRELL.
It is closely held, and never has been widely distributed so far as I have been able to learn.
Senator SMITH.
I suppose you would like to be understood as saying that the loss of the single ship, quite fully insured, would not necessarily break the price of the stock very much?
Mr. FARRELL.
Exactly; yes. You see, the ship cost about $8,000,000; I believe it was insured for something like $5,000,000 or $6,000,000; and net loss might be $2,000,000 to $3,000,000 which would not break a company like the International Mercantile Marine Co., or ought not to do so, at any rate.
Senator SMITH.
Have you figured out the real effect on that stock?
(The witness examined a copy of the Wall Street Journal of April 15, 1912.)
Mr. FARRELL.
I was going over this, if you desire, I can give the trading by hours on the stock exchange, and the prices.
Senator SMITH.
I would like to have it; yes.
Mr. FARRELL.
From 10 to 10.25 a.m. on April 15, 800 shares of Mercantile Marine common were traded in at 6; 200 shares Mercantile preferred at 20, and 100 at 21.
From 10.25 to 10.55 a.m., 100 shares of Mercantile Marine common were traded in at 6, and 100 at 5 3/4. Of the preferred, 300 changed hands at 21 1/2, 300 at 21 5/8, 300 at 21 1/2, 500 at 21 3/4, and 100 at 21 1/2.