New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-12-20
COTTON FIRM SUSPENDS.
DUE TO DEF4LC4TTON.
announcement by Laighton 8
Foulke-Em pLoye Gone.

changes. had found themselves unable 10 meet
outstanding obligations owing to defalcations on
The part of an enploye of the house. The an
nouncement served to intensity the nervousness
Of the cotton market. where prices took a sud
den jump. Estimates of the amount of the
defalcaton ran high as 100000. but it is
probable that this figure is much too large.
simultaneously with the news of the suspen-
zion it became known that John H. Laing,
,hirty-two years old, OF No GA East One-hun-
d-ed-and-thirty- fifth-st.. who had long been in
the firms employ and confidential clerk.
had disappeared on Friday afternoon, leaving
his books in q badly tangled condition. De
tectives were looking for him yesterday, but up
10 last night he had not been located
The firm Of Laighton & Foulke, although not
one Of the largest IL the cotton commission
business. has maintained the highest credit.
The partners are Charles 2. Laighton and Bay
ard r. Foulke. Mr.. Laighton. who is one OF
the charter members of the Cotton Exchange.
having been a member Of the old Cotton Board
Of Brokers. inherited the establishment and
credit OF his father, who was well known as a
Gotten broker, and has carried on the business
since 1870 under his Owl
Mr.. Laighton has also been a member OF the
Consolidated Exchange since March 1855. The
firm. however, has been primarily a cotton house,
doing comparatively little in stocks. 1t trans
and its reputation for conservatism in cotton
movements was we'll known. In these circum-
stances its credit high TO be never
questioned on the exchange, ana in trading IL
did not have 10 put up original margins on a
moderate amount Of business.
This high credit was taken advantage Of by an
enploy1e who trusted implicitly by the two
members OF the firm The heavy and excited cot
ton market OF the last few months was an ex-
condition as TO make detection unlikely.
Although Mr.. Laighton. the floor member of
the firm. had advised customers OF the house
20 deal carefully in the cotton market. LANG.
vho was practically manager OF the Office,
a pronounced bear i'll cotton. He had been
in the market on his own account for some time,
with the knowledge of his employers, but APP
parently stopped sp%cuIating on the short side
of the market some time ago.
A few days ago, however, Mr.. Laighton no.
;iced that considerable number Of short or
ders had accumulated Without suspecting any
trouble other than that which might be caused
by weakly margined short accounts in a buA
market. he started to look into conditions.
LANG who had charge Of the margin ac-
counts and the cash books was asked to make
a statement Of the exact condition Of these ac-
counts but he put of the members Of the firm
from time to time by saying that business was
SO active that the books were far behind.
on Friday. when the market took sudden
upward turn the members Of the firm found
that they would have to call their short Gus
toners for additional margin. II, was noticed
that Laing was exceedingl nervous and be
frayed his feelings when the market was going
upward
Notices sent out addressed TO some of the
supposed short customers OF the firm came
back, and a member Of the firm began TO sus-
pect that something was wrong. He taxed LANG
with being in the market on the firms account,
but LANG denied It
About O'Clock on Friday afternoon more Of
the notices came back, showing conclusively
that these were dummy accounts and that no
such persons existed as were named The mar
let began 10 go up again.
Just about this time the trusted ernploys.
without waiting TO put on his cuffs or overcoat,
walked out Of the Office. He went a nearby
restaurant and got drink That the last
seen Of him by any one connected with the firm.
His disappearance confirmed the suspicious
of the members OF the firm that something was
wrong. They called in experts and put them
on the books. which found to contain
many accounts which could not be located.
The books showing rnargined accounts were in
q chaotic condition.
Russell Benedict, OF No IS Wall-st.. counsel
for the firm, was promptly called in and ad-
vised the firm to suspend until it could find out
how it stood. Accordingly word was sent into
the Cotton Exchange. and at the opening call
yesterday Superintendent King read the notice
OF suspension.
All Friday night and all day yesterday the
members OF the firm and the accountants
worked the books, bat il was stated in the
afternoon that il would be impossible 70 find
out for several days 10 what extent Laing's
operations had involved the arm.
Great sympathy To- the firm was expressed
by members OF the Cotton Exchange yesterday.
II was said by some that Laing had been selling
ill he was at loss OF three cents a pound on
some OF his cotton. Even with the movement of
the last three days he would be at a loss of over
q pound.
The frm declined 10 make any estimate Of the
amount Of the mans trading yesterday. Twenty
thousand bales traded in at q loss OF a cent
pound would mean 100000
Communications were sent TO all members
OF The Cotton and Consolidated exchanges yes
terday, asking them TO send in statements at
once and verify all accounts 1t is not believed
that LANG did any trading ~ stocks
announcement OF suspension Of one firm on
re. re CoeIoA LAchange by the system Of ring
ins contracts, puts the responsibility for max
Ing good contracts other houses with whom,
y mas been trading. Houses who have bought
me cotton sold on these short contracts were
at once put IN short position on the market
and part Of the rise which followed the an
:ouncenlent OF the suspension was Dire 10 - |
covering OF these shorts. The announcement ba5
10 cOnsiders bic effect the market
LANG lives at No. G2f East -hun6radan5
thirty hfth-st. with his mother his sister md
his aunt. who is Mrs. Nichols 1t was said
there last night that he had left home on TSri
day. morning AT the usual time TO go 10 the
once, and had not been seen or heard from
since then by his family. His relatives did moi
know until yesterday afternoon. when some one
told them OF the newspaper accounts of T.sigbe
M Z EfrF1Ea Hegffa