New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-08-04
PRICE THREE CENTS.
HENRY ALLEN & co. SUE.
A CORDAGE CRASH ECHO.
100000 DEMANDED FROM JAMES
NJ. WATERBURY AND OTHERS

CRIMINAL CHARGES MAY RE MADE-THE ACTION
BROUGHT TO RECOVER SUMS WHICH THE
FIRMS CUSTOMERS FAILED TO PAY WHEN
THEIR MARGINS WERE WIPED OUT.
suit has been begun by Henry Allen ~ Co.,
the brokers who failed at the time of the
Cordage crash, against James W. Waterbury and
other officers Of the National Cordage Company,
which discussed with great animation in
Wall Street yesterday. Information about tho
step of Allen & Co. did not leak out until
after the Stock Exchange closed. The firm was
dragged down when the Cordage Company went
into the hands Of receivers, because its custom
failed to strengthen their margins when prices
fell.
Allen & Co. carried a large amount of Cordags
stock for leading officers and directors Of the cor
poration on margin. When the decline in the shares
set in these men bought freely OF Cordage in
effort to prevent further reduction in values.
They were unable to pay for their purchases
outright, and therefore got Allen 81 Co. to help
them buy the stock. The clique did not have
money enough, however, 10 stem the tide. Prices
declined steadily until the margins were wiped
out.
Mr. Allen, to protect himself might have sold
out the securities, but instead he held them on
the promise of his customers to advance moro
margins. As the prices declined, the Cordage
people became indebted to him in large amounts.
They were unable to raise more funds and
when the crash came Allen & Co. went
into bankruptcy. Mr.. Allen naturally believed
that he had been unfairly treated, for he allowed
the market to go beyond the margins on the
promises of his customers TO make good the def
icits and protect him from loss
The Indebtedness of the members of the Cordage
Company to Allen 4 Co. is fixed at nearly $780,
600. Mr. Allen has waited patiently since the
failure for payments from these customers, but
there has been no indication that he would re-
ceive any. Promises Of various sorts have been
made 10 him from time to time, but they have
amounted to nothing. Recently Mr.. Allen deter.
mined to bring suit against the customers to re-
cover the amount of the margins which he ad-
vanced
Mr.. Allen hnted yesterday that criminal
charges might also he brought. lie thinks that
fraud was practised to obtain support for
the Cordago stock at time when the
hackers Of it knew that it was ,a desperate
condition. Mr.. Allen, when seen last night, said
" 1t is true that | have brought such suit
] have done so in order to effect. if possible, a
settlement OF our claims against the members OF
the company. We have been waiting for some
time for settlement, but there seems 10 he no
determination their part TO make one, conse-
quenty We brought the suit"
A friend Of Mr.. Allen told Tribune reporter
that criminal proceedings might follow. Mr..
Alien would not discuss this statement last night.
but he ntimated that such the ease The
charge which would be brought would be obtain
ing money under false pretenccs.
James VI. Waterbury was not in the city last
night, but his lawyer said that he was ready to
fight suit at any time. Mr.. Allen intends to
remain here until the courts act upon his suit,