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. This is a direct statement from Mr. Franklin on Monday afternoon following the accident, that 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 which he based the necessity for caring 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 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 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 that tape, if it could be preserved.
MR. FARRELL: Yes; I know, but it had not been preserved.
SENATOR SMITH: You have made a 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 that 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 seven­eighths 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 seven­eighths 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 have been the effect?
MR. FARRELL: Probably about the same, because after the full extent of the case became known the Mercantile Marine price changed very little.
SENATOR SMITH: Of course it was filtered out so slowly that 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 share. 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 the 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 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.
From 10:55 to 11:45 a.m. on April 15, 200 Mercantile Marine common changed hands at 5 1/2, 200 at 5 5/8, and 500 at 5 1/2. Of the preferred, 200 changed hands at 21 1/2, 100 at 21 3/4, 100 at 21 7/8, and 100 at 22.
From 11:45 to 12:45 p.m. on April 15, 100 Mercantile Marine common changed hands at 5 3/4, 100 Mercantile Marine preferred at 22 1/4.
From 12:45 to 1:45 p.m., on April 15, 200 shares of Mercantile Marine common sold at 5 3/4 . Of the preferred, 200 sold at 22, 100 at 22 1/8, 100 at 22 3/8, 100 at 22 1/2, and 40 at 22 3/4.
From 1:45 to 2:15 p.m.,. 100 Mercantile Marine preferred sold at 22 3/8. That was the only transaction recorded during that time.
From 2:15 until 2:45 p.m. on April 15, 100 Mercantile Marine common sold at 6, 100 preferred at 22 3/4, 100 at 23, and 100 at 23 1/8.
Those were all of the transactions up to within 15 minutes of the close of the market, at 3 o'clock, according to our records.
The closing price on Mercantile Marine common was at 6; unchanged for the day. Mercantile Marine preferred closed at 23 1/8; down 7/8 net for the day.
SENATOR SMITH: Mr. Farrell, the bulletins which you have handed me are all that contain news items regarding the Titanic, which items appeared on the ticker?
MR. FARRELL: I think, Senator, there is one item ­ one bulletin ­ which we lost. This item which appears on the ticker, and which has already been incorporated in the record, was on one bulletin which was lost, somehow or other:
Officers of White Star Line at 8 o'clock this morning that passengers on the Titanic were being taken off in boats and that there was no danger of loss of life. The Baltic and the Virginian, they said, were standing by to assist in the rescue.
Substantially the same thing was published in the bulletin.
SENATOR SMITH: In all other respects these bulletins which you have handed to the committee contain all the information that appeared on the ticker and, I assume, in the Wall Street Journal as well?
MR. FARRELL: Yes.
SENATOR SMITH: Regarding the Titanic?
MR. FARRELL: They contain more than appeared in the Wall Street Journal, because in making up the Wall Street Journal we rewrote the statement, partially, so as to make it more readable.
SENATOR SMITH: How about the succeeding days? If you have the ticker tape for Tuesday and Wednesday, I would like that?
MR. FARRELL: Yes. Before I go I would like to compare those with the bulletin so as to be positive. They are all numbered, so that I can very easily check, up.
SENATOR SMITH: All right.
MR. FARRELL: This is the ticker tape for Tuesday, April 16. I suppose that I had better give this in chronological order. Since I got your telegram yesterday I have not had time to carefully check up these for Tuesday, but I think I can explain everything.
SENATOR SMITH: I will let you go through and check them up, if you prefer, and we will come back at 2 o'clock.
MR. FARRELL: There is very little on this which requires investigation.
SENATOR SMITH: Very well; proceed.
MR. FARRELL: At 8:02 a.m., April 16, we published the following:
White Star liner Titanic sank at 2:20 a.m., Monday, five hours after crashing into an iceberg. More than 1,500 persons have been drowned.
SENATOR SMITH: This was Tuesday, the 16th of April?
MR. FARRELL: This is the 16th Tuesday. You recollect that the information really came out after 6 o'clock Monday night. [Continuing reading:]
At 7:30 a.m. this morning an official of the Mercantile Marine stated that company had been receiving names of those saved all night and that so far they had received 200. He stated the captain of Carpathia estimated there were between 800 and 850 persons saved. The names of Mrs. J. J. Astor and maid are among those received, but no mention is made of Col. Astor or J. Archibald Butt.
Latest message is. Carpathia has 866 passengers aboard. Grave fears for rest of Titanic's passengers.
First definite message received was from Capt. Haddock, of Olympic, which stated: "Carpathia reached Titanic position at daybreak. Found boats and wreckage only. Titanic sank about 2:20 a.m. in 41.46 north, 50.14 west. All her boats accounted for, containing about 675 souls saved, crew and passengers included. Nearly all saved women and children. Leyland liner Californian remained and searching exact position of disaster. Loss likely total 1,800 souls."
That was a summary gleaned from the morning newspapers, which were at hand, and by a reporter who visited the White Star offices that morning; but they had practically nothing more than all the newspapers had at the same time.
SENATOR SMITH: So that you based that publication on general information?
MR. FARRELL: On general information.
SENATOR SMITH: Which the papers had printed?
MR. FARRELL: Yes.
SENATOR SMITH: In their morning editions?
MR. FARRELL: Yes.
SENATOR SMITH: And not upon any conversation that you had with any official of the White Star Co.?
MR. FARRELL: When our reporters visited the White Star offices we got similar information, of course. It was common property at that time.