New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1884-05-01
JAMES r. KEENE DEFAULTS
UNABLE TO MEET HIS PUTS"

kepna.
.roto, Yesterday announced ms inaoll'v 10 'ie''
.,oo.s s,"'o' ~, stock privileges For more than
year there have at times been rumors OF n's i''n
S,aI emharrassment and when it was hrst runlorcu
:; .ho Street u nj he was in trouble no renahce was
,oaa an the reports Before the close ot pus'"eS'
-, tho Stock Exchange however, the stories "oio
confirmed. Notices had been sent 10 MI heV', y"
TUESDAY by several holders OF puts Oh >"i,ou'
stacks that they would be presented 'ile hoN, u,!
Yesterday. when the stocks were presen'o"' NJ
Keepe stated that he was unable 10 take 'hc'i. "
some cases an agreement was made rs '' the u'n''
ence between the put" price and the inarke, quo-
tation upon which the transaction woulu oo 'o.," .
bnt Mr.. Keene was unable TO pay any OF the claims
presented against him. Late in the daV ho luz
nished the following statement to the press, 10.
.tr having out millions dollars ID cash IN the ias,
to months In my efforts TO protect my pVnegeS% ~ % TI
taIt In The interest of those with wnom nave ous'
ina first whisper of Mr.. Keenc's default came
from thc putt and "call brokers, VINO MAKE
their Headquarters on the curbstoneS OF Ne"-s',
The angry denuuciations of some OF those VINO uau
vainlv asked the California operator TO 'ahe 'ne
stock they offered 10 him soon made the sI'u" '''
known TO everybody III the street. lhey hau o''
making visits TO Mr. Keene's office, on the fourth
floor of the building running through RON iIo'u
To New ST.. along Exchange Place, and each one h'u
,oturned with the unwecome news that he was ull-
oble In meet his OBLIGATIONS The failure III 30 way
affects the stock Exchange. except rs the memnefS
whobaye done business for Mr.. keene are conceIueu'
Mr. Keone is not a member of The exchange Inc
amount of his outstanding privileges II Is lnpoSs
bic TO ascertain. The general estimate cl uo
amount was from 100000 TO 100000 shares
Among those whose tender OF stock was decline"
was Frank Bassctt jr., who offered M h''H'
$500 shares Of Erie common at ~ MI D",S''''
4 old Ca.f fnD
ness. stated that the total differences OWED
IN him by Mr. Keene would reach about
$40 600 Other holders of "puts" are sald 10
be Charles g. Johnes, member OF the EXchahGe
the Stock Exchange firm of Voorhes Hardy
Henry H. Truman. l. V. Newcomoe ~ Co.. l. l.
White Il Co., and w. Z. Dormn
TRYING To FIND now HE STANDS.
Apromincnt LAWYER, who Is in position TO speak
regarding the matter sand last evening; ne
whole story IS told IN the statement when MI
Keepe has issued to the press. II is impossible
for him to tell how many privileges ne
has outstanding Mr.. Keene has paid out mil
lions within the last twelve mon rs on privileges
which the course of the stock market made unrro-
Il able 10 him. Within the last few weeks re has
maid ont s 100 600 and within the last few months
he has lost two or three millions. There were pen-
ty of offers Of help made TO Mr. enc today, but
he declined them. Ills affairs had reached such
STAGE that he did not know how he stood and the
acceptance of assistance would only have post
poned the inal end. lie preferred, as he expressed
it. 10 'call halt now and ascertain just
how he stands DO not oeHeVe 'ha'
ms liabilities to members of the Stock Exchange
outside of the stock privileges will amount to over
S35. 600. None of his privileges are held SO heavily
NV any one person that there is likely to be any cn
barrassment growing out of the failure The largest
claim for differences on these privileges IS less than
10000
WHERE THE LOSSES WILL FALL.
Whatever losses occur under Mr.. Keeues privi-
leres will fell primarily on outside people
who purchased them through the put and call
brokers or through stock Echange firms
The brokers viii suffer only where
thcir customers are unable to bear the losses on
stocks they have bought and sold against the prlvi-
leges. A, the privi'o 81, widely distributed, 1t
spot tholght that any serious trouble can grow
ont of Mr. Keeuc's default The opinion of the
privl'cle brokcs Is T. the prospect Of 'lr Keenes
final settlement was reflected 10y offers late yesteI-
day TO sell some of his privileges at 90 per cent
of their original cost. There SAID TO he no grain
privileges issued by Nj Keene now outstanding
There mc some United Pipe Line certificates.
The amount Of these is estimated atabout 1,OOOO0
barrels They include calls at ~ 10 per barrel
and " puts " in the neighLoThood Of % cents. 1t
WAS reported that the sharp advance in the pctrO-
Ienm market yesterday was partly due to efforts oi
the standard oil Company to prevent free deliv-
cry OF the oil on the Keene "puts.'
WILD OPERATIONS.
Many Of the puts" issued by Mr.. Keene within
The last few weeks have been al prices eXtIayaganly
above the market prices. Ia addition TO thc put
on Erie at - AGAINST the closing asking quotation
Of l6a.. were puts of Western Union at Il,
agalus, 62l2 asked last might, Uuon Pacific at IS
against $685., Pacific Mail AT 81 against 4l's. and
other stocks in the sameTeauon. 1t is believed that
Nj. Kecue realized the hopele,sucss Of his affairs
some time ago and sold puts" at prices that woud
tempt purchasers in order to raise money to meet
hls immediate uecessiths desperately hoping that
possible chan e. m the stock Speculation would
save hun. friend of hls acknowledged that MI
Keeuc's operations on privileges recently had been
GuttcYly Wild" Ghc fact that Mr.. kcrnc has been
losing money ~ the street was recognized by care
tul observers long Time ago Ioi more lhah
wear many conservative houses have refused To ac-
cept a. privileges as partial margins tor the opera
tons of their customers, year ago Esl January
the business Tclat Ons ceased between MIR. kcenc
aud :. W. NOocOck n Co, who had for years acted
a. his brokers ~ the stock Exchange, handling
MANY millions of dollars The brokers who are SAID
10 have done most of his Stock Exchange business
recently Collins d Levy and AttcrbuIy n
Illnghast
MR. KEKNEs sPrCULAuoNs.
well known western man who held close rcla-
tions with Mr. Keene. when hc first appeared as =
Wall Street specuator said last evening at the
Windsor Hotel: " MIR. Kecnc came to Wall-st., III
November 1876, bringing with him $5,oO00O0
which he had made in California first in the great
rise in mining stocks and aiteTward IN Their heavy
drop Ills iIst important venture was with MI
Gould in the Atlantic and Pacific Telegraph COM
bination against Western IniDn. In the summer OI
1877 the two men quaueled and Mr.. keene
hailed by Vail street a. rising power distinctly
In opposition t. Nj GOu!d. At the tne OF the iali-
road riots N 1877 Mr. heenc Mas almost the only
who dared q buy stocks. lie bought them by
tho IA tine face O tue scYcTest decline and II IL
had not been tOl him tho consequences To the mar
ket probably would have been terrible. Although
lie traded both sides Of the market most of has