New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-03-08
HERMAN CLARKE BLAMED.
,,,c rJRU FORCED TO SUSPEND.
~ 1-crr,AToNs IN SUGAR CAUSE HUNTER
CLARKE & JACOB TO GO UNDER.

&c CHARGED THAT THE ONE PARTNER ISSUED
.n,rs" AND Calls WITHOUT THE Ac-
,uoptry OF THE OTHEEs-HE Is NOW IN
THE SOUTH FOR HIS HEALTH-A WELL
KNOWN CIUBMAN AND NAcIITsMAN
Ono of the eequcls of the tremendous manipu-
,.tion in the stock Of the American sugar HeHn-
,@~ Con,nanv on Tuesday was developed in the
s'srension Of the Stock Exchange firm Of
1T',,.er Clarke & Jacob at No 81 Exchange
place The failure has developed the story OF
.roacb Of trust on the part Of one Of the men,
49, - tho firm who is absent from the city
urdar circumstances that lead to the conviction
.ha, ba has fed in anticipation Of the discovery
=. bis v,rong-doing His absence makes 1t i'm
.ossitle n say how important the consequences
- .ba failure may be- as the Irregularities which
.o,gb+ the house to grief have just been dis
oovered Herman Clarke. who IS well-known ih
A. cluh circles of New-York. and who has
Iova1 in excellent society, is the man whose
ons-ations have carried his partners to the wall.
Tho firm Of Hunter. Clarke & Jacob was or
.,i,a1 on November O. 1898. It was composed
~ Frank X. Hunter Herman Clarke and Leon
ard Jacob, jr. The firm never acquired a pron-
,snt position at the Stock Exchange but II was
sunposed to be doing a safe commission pusi-
moss of moderate size. About two months ago
,ba house began to build up business in "privi-
,eges' on stocks. issuing puts and calls on
,ba active issues OF the stock list. the ousi-
noes Is attended with considerable danger in
onv stock which is liable to violent fluctuations.
and Russell Sage is the only person VINO, IN 'he
history of Wall Street, has been able 10 weather
the storms that at times are liable To peat
ohort the man who deals in these speculative
NJ lGr rlA lpF
o,,v n GO South. pleading that he worn out
ond needed rest On Tuesday occurred the enor-
,oous transactions in Sugar stock, which rose
- ner cent and declined per cent within less
than two hours. a circle of fluctuations rarely
us,r.ssed even in the most exciting times Of
panic.
DISCOVERY OF THE LOSSES.
Yesterday the firm began to pay out money
m "calls" on sugar which bore the hrms Sig
nature. and had been issued at prices to 10
ner cent below the current market value OF the
stock. Tuesday night it was first suspected by
,ha r,en,bers of the firm and the manager Of the
Office that something wrong existed in the situa-
.,o, of the house /; was decided to endeavor
n meet all obligations. and Street rumor has ii
that $4,000 was paid out before II was de-
tern,ined 10 give up the fight. Transaction
after transaction was developed which involved
the firm, but of which no one except Mr.. Clarke
seemed to have knowledge until 1T became ap-
parent that in self-prOtectiOn the other members
OF the concern must be forced TO suspend.
Ofcial notice was sent to the Stock Exchange
al about 2:45 p. m. and an assignment was made
70 John Hunter jr.. of the law firm Of Hunter
& Battle in Temple Court. This action was
taken to enable the members Of the brokerage
isvus. 10 iearn where tney stood financially and
70 summon Mr.. Clarke back from his vacation
TO explain the situation.
At the Office Of Hunter. Clarke & Jacob ycster-
day afternoon no complete statement Of the con-
6ition Of affairs could be obtained. Mr.. Hunter
and Mr. Jacob were there all day with the as
signee and counsel trying to discover how far the
FIRMS solvency had been involved. They de-
clined to talk TO reporters. but Fred" Allen, the
manager expressed the belief that eventually
all creditors would be paid in full and ne said
that he hoped the firm would resume in a short
time.
ACTING WITHOUT AUTHORITY.
It was learned from we-informcd persons how
ever. that Mr.. Clarke had been issuing calls"
on stocks without authority from his partners.
The extent to which these "privileges' have
been sold by Mr.. Clarke will develop the amount
of liabilities of the house and it is hoped that ne
50 that the concern can resume business The
recklessness with which Clarke sold these obli-
cations may be judged from the fact that num-
bers OF privileges" have been disposed Of in the
last week or two to call" Sugar at figure only
per cent from the market prices for nominal
sum. The larger number Of the calls" however.
are said to have had life OF fifteen days. The
buyers of the calls have had big profit for
days past and the tremendous rise in Sugar
since last Saturday must have inflicted severe
losses on any attempt 70 protect the privileges
made by the concern issuing them.
The senior member Of the suspended firm.
Frank x. Hunter has been a member Of the
Stock Exchange since November g. 1893 H exc
cuted the business Of the house on the floor Of the
Exchange. He is one of the Hunter brothers VINO
are wel-known in Wall Street, the best known
among them probably being Arthur NJ. Hunter
Leonard Jacob jr., is an Englishman and the
son OF Leonard Jacob who was formerly a mem
Der Of the drygoods house OF Arnold. Constable
Co, but who is now retired from active busi-
ness. Young Mr. Jacob is popular club man.
having membership In the Union the Larchnout
Yacht, the Rockaway Hunting, the Seawanhaka
C0f.nthian Yacht and the Racquet clubs. lie
lives at No. % East Seventy-fourth-st.
THE ABSENT PARTNER
Herman Clarke. the partner whose operations
have led to the failure Of his finn. is a Canadian
by birth. His father is r. c. Clarke president
Of the Union Fridge Company. a contracting
concern Of Buffalo and is believed to possess
large wealth. Herman Clarke received his first
business experience in the New-York Office Of his
fathers bridge company. Some time in the
eighties he Joined the Stock Exchange and did
fairly good commission business Through his
efforts the firm Of La Montague. Clarke & Co.
was formed on January /. 1887, the partnership
consisting OF T. La Montague, jr., son OF the
well-known wine merchant, Clarke himself and
wallace b. Smith. The concern started In buS.-
hess at No 45 Newest. on June %. 1892 Elisha
NJ Fulton. jr OF the officers of the National
Cordage Trust. became special partner. The
nrm took handsome offices in the Mills Building,
opened special telegraph wires TO Montreal and
other cities started uptown branches and took IA
prominent place in the eyes Of Wall Street