Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1902-01-16
FAILS AGAIN
"Corn King" Unable to Meet His
Margins on the Chicago
Board Of Trade.
THE CAUSE IS A SLUMP IN RYE
Tried to Dispose of the Grain Outside
the Pit, but Failed-Effect
Of Collapse.

Chicago, Jan. 14.-A notice was
posted at the opening of the board OF
trade calling for the closing of all open
deals with George III. Phillips, the for
mer ''cOrn king A heavy call for
extra margins is said to have been the
cause of the posting of the notice. The
call was made the previous afternoon
and Phillips and his staff worked all
night over the firms books. The trOu-
BILE is said to have been due to a 31a
cents break in rye. Phillips is credit
ed with holding a line OF 100000
bushels of this cereal, mostly in May
options. The break was caused by a
sale of $4,000 bushels. Phillips is said
to have on his books also from 4,OOO,-
600 to 100000 bushels of May wheat
and about 100000 bushels of May
corn.
Failed to Negotiate.
Phillips opened negotiations with ell
evator men before the opening of the
board of trade in an endeavOr to dis
pose of his rye outside the pit. The
negotiations fell through and May rye,
which closed the previous day at 66A
cents, opened with sales from 81 to
81 cents. The whole Phillips line was
dumped on the market. Brokers act
ing for Armour & Co., however, bought
nearly all of it and the market in con-
sequence rallied rapidly to 65 cents.
The effect of the notice posted by
Secretary Stone was instantaneous,
the whole list opening off sharply.
Wheat opened 1 to 1A cents lower;
corn II to / cent down, and oats near
~ cent depressed. Mr. Phillips could
not be seen following the announce
ment of the closing of his deals, but
members of his staff stated that he
was still in good financial condition.
Phillips Makes Statement.
Mr.. Phillips gave out statement,
in part, as follows:
''The amount involved in my trOu-
Bile of today is about 100000. My GUS
toners had their trades well margined
and if the trades closed out today bring
fair price can meet all my Obliga-
lions. l was long about 100000
rye, 100000 wheat aud 100000 corn
and oats. Saturday member of the
board interested in breaking the rye
market sent notices calling for an ex-
ira margin of 10 per cent. on rye. This
naturally caused selling orders Mon
day, and the representative OF member
mentioned, finding the market bare OF
orders, forced the market down j
cents. This was done in a moment
and the news flashed all over the cOun-
try caused CONSERVATION among hold
ers of rye contracts, many Of whom
sold on a weak market. "A decline Of
1 cent in wheat, coupled with >rumOrs
rejecting on my strength, resulted in
! unusually heavy calls for margins.
was for the moment unprepared and
the only alternative left was to close
out. l have no excuses to offer and
no complaints to make"
Career of Phillips.
George I'll. Phillips career on the
board Of trade during the last two
years has been such as to keep him
most of the time in the public eye.
A clerk originally for one of the large
commission houses, he finally branched
out as broker and member of the
board and in the early summer of 1900
began to attract attention when it be-
came evident that he was engineering
a corner in corn. A young man, he had
the old-timers of the corn pit hard up
against the wall before they realized
the fact and for months he had them
at his mercy, dominating the corn pit
at his pleasure and forcing the price
up as he saw fit.
Axiom Held True.
But the axiom of the floor is that
no man ever successfully ran a 'cOr-
ner' and got out of it safely. and it
turned out so in the case of Phillips.
Careless bookkeeping and the fact
~ ,i o1str 1lo.s h
merged with private deals resulted in
the: firms asking for receiver in Au-
gust, 1901, and the affairs of the old
George HI. Phillips, company were
wound up and it was only recently
that Mr.. Phillips started anew, backed
by many of his old customers who
had implicit faith in his honesty and
ability.