Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1904-03-19
SULLYS DOWNFALL
Failure Of the Great Cotton
Market Manipulation.
His Firms Liabilities Are Said to
Be Millions.
Sensation in Financial Circles Throuah.
out the Country.


months been the biggest figure in the
cotton markets of the world, and who
has pulled cotton from seven cents a
pound to over II, announced. today,
his inability to make good his engage
ments on the New York Cotton Ex
change. Within Il few moments cot
ton fell nearly So I, bale from the high
est figure of the day. Edwin r. Had
ley of Providence, II. l., was member
of Sully's firm.
Scenes such as followed the an
nouncement of thu failure it has been
the privilege of few brokers to witness.
Traders in the street have witnessed
stock panics i'll previous years, corners
have been broken and many crashes
have been recorded. but none has been
| accompanied by such frenzy and con-
fusion.
While there had been no premonitiOn
of the impending crash, no morning of
the season had witnessed a more de-
mOraliZcd market. In less than 10 min
utes after the opening, half Il cent had
been taken off the price of cotton
Prices went up and down 10, 20 and 80
points within two and three minutes
May opened at 1926 and sold at 1922;
went down to 14.75 in less than Is min
utes, while July, opening at 1922, went
down to 14.GSG. Toward the end of the
half hour carly sellers started to COW
| err and there was a rapid advance.
There was nothing in the news to ac-
count for the excitement. 1t seemed
merely a renewal of bear operations
and the catching of further stop orders
Shortly after the afternoon session
| however. there was a lull in the pit and
| at about five minutes after 9 o'clock the
| announcement of the suspension was
| made by Superintendent King, who
read from the rostrum this notice:
I'VE regret that we are unable to
meet our engagements and will there
fore have to suspend"
DANIEL ]. SULLY & co"
For a Jew seconds there was an omi-
| nous quiet over the floor as though the
| news had stunned all within the hear
ing of the announcement. Then. with
one impulse, mighty shout went up
from the bears who had been fighting
Sully and the bull clique for months
Hats We're thrown into the air. coats
were torn by frantic brokers in the mad
efforts to unload holdings and chairs
and camp stools were dashed into the
pit, to emphasize wild traders efforts
to sell. Messengers were hastily sum
moHed and soon were rushing in and
out of the building, telephone booths
were besieGed and telegraph offices
flooded with dispatches.
Outside, the Cotton Exchange APP
pearance gave little indication of the
pandenonium within until the mes
scngers began to rush between the cx-
change and the brokers Offices Soon
the news reached the stock produce and
coffee exchanges, and traders on these
markets FASTENED to the scene of the
panic. Crowds assailed the entrance
to the visitors gallery, but IL double
guard was placed ut these doors and
adrnittance was refused to all, but
those accompanied ny members
1t was estimated that something like
thrCe-quartcrs of Il million bales of cot
ton We're traded in during the 20 min
uteS of The panic following the an
n"'lnt emcnt and that OF this upwards
of half Il million bales represented
forced liuuidation' or the selling out
OF r:"il whose margins have been near
~ or quite wiped out. AS the market
slumpod go points during this period.
the loss falling on this element amount
ed to something over Il million dollars.
The market Steadicd after about 20
minutes and then there was a sudden
upward shoot of about Il hundred
points. This sharp rise was brought
about by the buying OF brokers and
spectators who saw that the market
had stunned too far and would react.
just rs it did a part of the excitement
On the floor Of the exchange was caused
by the scramble Of brokers who wanted
inst such bargains and had to fight
to get in the ring to get them. Tho
buying rush was almost IS exciting and
just as noisy, if not more SO, as the
panic.
The announcement of Su'lys suspen-
sion was put on the tickerS everywhere
within il few minutes after it was made
ard there was somewhat of il furry on
the fioor OF the New York stock Ex-
change after the news reachd there
Mr.. Su.iv is Il member of that OK
change. having purchased n seat two or
three months ago. Stocks went off from
half a point TO a point and half on the
fear that the failure might bring rush
Of stock selling there. The weakness
WIS only momentarily, however. for
the word was passed around that Sully
had not been trading in stocks and, in
fact that the clearing house sheets had
never shown a single transaction by
him. The market was treasured and
stocks vert up again.
Upon the announcement Of the fail
ure, press representatives hurride to
see Mr.. Sully for the purpose of getting
some statement. Mr.. Sully, however.
shut himself in his private office and
would not be seen. Shortly after
o'clock Sully went into conference with
counsel and later Edwin Hadley. Jr.. of
Providence, +. l.. one of the members
Of the firm. sent out a message by his
secretary which read:
mo statement of any kind or de-
scription Mr.. Sullv directed me to say
will be given out from this office, to-
day. Possibly n statement will bc
ready, early Saturday morning.
Mr.. Hadley was later quoted as stat
CONTINUED on page 81