New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-09-23
i NO1E-BROKERS EMBARRASSNEEE


LARGE DEALER N COMMERCIAL PAPER IN
TROUBLE-CONFIDENT OF Ills ABILITY TO Ex-
TRICATE HIMSELF.
Wall Street has been dIsqueted recently by fire.
quent rumors of impending failures. No public
announcement of any failure has yet been made.
but the occasion for the reports is un-
dcrstood fully by business and
bankers The fact that no failures have
actually occurred is believed to be due largely to
the unusual circumstances Of the case Many per-
sons familiar with the matter express some conf
dence that the difficulties will be tided over.
Alonzo Folett of No. Wall-st., has been
for several years of the largest dealers
in commercial paper in this city. He has
been second at least to only one DINER mouse,
whose Office is in Broadway, Mr. lollett has num-
bered among his customers some of the most prom
inent firms in the dry-goods the grocery and espe-
cially the leather trade. He has been engaged IN
the business for ten or twelve years and apparently
the magnitude of his transactions increased yearly.
His chef customers have been in the habit IN late
years. of leaving their paper at his office and
drawing money against il according 10 their necessl-
ties. In this way Mr.. Follett has become banker
as well as a note-broker he paper which he re-
ceiyed and on wDich he made advances Mr.. Follett
sometimes sold, but when he thought
it to his advantage he made call loans
Mt the banks. using the notes as col
lateral security. The Manhattan Company Bank
which was lending Mr.. Toilet. about 100000 IN
this way. recently called in the loan, and on Mon
day it attempted to sell some OF the collateral notes
because Mr. Folett had been unable at the call TO
repay tue loan. The Offering of this
paper in the market at once aroused sus-
picou. and from tins circumstance sprang the recent
runorS II revealed al tue same time the magnl-
udr OF Mr.. Folletts business and some OF me neth-
obs which he employed. Most OF the doWn-town
banks hold some of the paper negotiated 10y pr
Follett. Some of them bought the notes outright,
and others loaned money on them to h'm.
The great buN OF the paper Is single
name and while some of It Is
ran kcd rst-cass. Of II Is not considered above
suspicion. TIE failure % ole OF TWO OF the makers
OF IL would result Ia a considerable loss To the
banks
10 add to the complications in which the note
brokers affairs seem io be involved It was sdid YES
tcrday that Mr. Iollctt mad used large amount OF
paper mtrIsted 10 Mm for sale, and had
NOS accounted 10 hl- customers for the proceeds
The amount OF paper thus NypOlnecit"d OF sou 5uu
not accounted iOr WAS estimated at from SlOO,OOO
to $500 900. no holds this paper AMI whose II l.
are detlli, winch are concealed carefully 10y the
few persons likely 10 know them. The business
. house, which may lose 10y having lutruoted thelr
notes 20 Mr. FollrtC ar. not inclined TO puDdsh the
extent of their liability and the banks winch held
slngie-name paper negotiated by Mr. Folletl 30 nor
care TO admit the Olly of loss. 30 the lnei-
chants aud the banks are moved BY these conslderd
uons to support the note-Oroker III bis emOarrass-
speaking of his affairs last night, Mr. Foliett SAID
thar ms customers were perfectly satah; d ana were
/ receiving from hlm cool DIqcT IN satisfaction 81
I their CLAIMS he declared That the banks would
/ carry along the weak )ues, and tnat every tn:bg
/ would turn OuJ al right IA the end Ii the BANKS
held any paper mat could MOI De pdl.i an hidtutIS
they would extend II SO Is 10 relieve the merchants
/ from any distress -.
cradle money m speculation ON his own account re-
I Gently. and thit he rad bDeI associated rs times
with one OF his lafg It ouers whose ventures III
had I f.Nu IS 7 4,
! truth OF these rumoIs could not be NeriAeu aOso-
/ lutely yesterday.
what extent his nrIu had done business with / OIL
/ lett. sid: We have been doing n large business
with him for many years III note brokerage. and ne
/ has always done II rlGht. our business WIN MIN
was IL every instance with legitimate paper, or IN
bills receivable which he always negotiated Tor US.
heard Yesterday after my return from Saratoga
chat he was IN hot water aud went To him TO get u
/ balance of abOut 5000 aUe Us on TJ2,OOO Of
paper which We deposited y lth him few days ago,
M which time ne gave Us Il check ior ooO,OOO L
think 10 fortunate that the balance was 50 SMALL
aud the only reason tor TINS Is because we nave
always done legitimate business with nun. " hen
we nave deposited our DliIs rcceNaple WIN MN
We have always rcqu red check Tor the approx
mate amount. When he recommended to MS
by a PROMINENT merchant, several wears ago, the
merchant said Follctt had remarkable outlet Tor
legitimate paper aud we have reposed great cont
dcncc IN his honesty. believe that the recent adj
,unce foT loans has embarrassed him. and It VIII
depend upon how his strong ilienGS came 10 us
assistance whether he Will pull through
" Dd Sod not 20 on ms bond or IN order OF arrest
issued upon the application of ROssIter ~ Skid
/ more D asked the reporter.
Yes" SAID Mr.. Inurbcr ROssiter 4 Skid
more had an order Of arrest drawn upon claim OF
"a few thousand dollars. which FOllrtt aveled had
been more than paid lie surety $4,000
aud Mr. BoyutOn was the other bondsman with me-
Jackson :. schultz. who was also seen SAID ::
" oar rrm has done business with Mr.. FUllett IN
legitimate commercial paper for many years, and
We have always found hinl man OF stHct Intrrlty.
He however owes us % balance of about 5000 !;
perhaps 500 or $500 moro on some bills which we
deposited with him few days ago. lie at that
time sent us "a check for $4,000. when we lie
posted IN the Phoenix National Bank, where our
accounts afe kept. and TO my surprise the check
wa, retuncd 10 rs marked Not good nave
always believed that tollett did legitimate bust
ness but fear he hes been specializing lately
and ha, become involved. or Ia, been negotiating
loans on paper not strictly COMMERCIAL