The Wisconsin tobacco reporter. (Edgerton, Wis.) 1877-1950, 1902-01-17
PHILLIPS FAILS AGAIN
Corn King" Unable to Meet His
Margins on the Chicago
Board of Trade.
THE CAUSE rs A SLUMP IN RYE
Fried to Dispose of the Grain Outside
the Pit, but FaiIed-Effect
of Collapse.

Chicago, Jan. IA notice was
posted at the opening of the board OF
trade calling for the closing of all open
! deals with George H. 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
eight over the firms books. The trou
bic is said to have been due to 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
| sale of 10000 bushels. Phillips is said
| to have on his books also from 4,0OO,-
| 900 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
Goard 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
50 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 IS cents.
The effect Of the notice posted by
Secretary Stone was instantaneous,
the whole list opening off sharply.
Wheat opened / to ~ cents lower;
corn ~ to l cent down. and oats near
| ly 1 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-
bic of today is about 100000. My GUS
| toners had their trades well margined
and if the trades closed out today bring
| q fair price | can meet all my Obllga-
lions. | was long about 100000
rye, 100000 wheat and 100000 corn
and oats. Saturday a member CT 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 )
| cents. This was done in 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
! l 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 II. 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
q 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 ''cor-
ner" and got out of it safely, and it
turned out so in the case of Phillips.
Careless bookkeeping and the fact
that some of his partners became sub
merged with private deals resulted in
the firms asking for a receiver in Au-
gust, 1901, and the affairs of the old
George FL. 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. .a