The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1905-04-21
.SULlY CASE MAY
NOW.B|E|. R ] | \ |:
Sensation May Follow Action 81 81
Court on Recommendation
of Referee Coke.
ATTACK STOCK EXCHANGE *. ] Y,
Ii Cotton Exchange Transactions
Are Proved to be Gambling
sfg3 II, 81 49, 1tr.,, AZ .S+k;,,rr SO
ATTACK STOCK EXCHANGE ];
Il tl,y i 1. $50 ciated Press

~ ID
Is NEW YORK, April 20 --Ma Crane Coke,
referee IN bankruptcy inNthc Daniel ".
sully case, to-day sent to Judge Holt e'lt
81 the United States District Court an
op,nion which, II approved by the court I,
NIL reopen the K Sully case entirely, ana
bring up orndjudication several Siinpor.-
ant and almost sensational points; Inc
opinion is given upon the applitca',on %
two sets OF petitions. ono from lst win Wi
lHa wley and frank H Ray, who have
been sued BY $sully's trustee IN bank
ruptcy for certain sums alleged to hay
been lost through participation with sully
in alleged cotton pools and the other
from, creditors who are not members OF
the Cotton Exchange
Three questions were brought up:
First Whether s1,0oO,o6o paid on sntur-
day March IS, 1904, was preference a no I
so illegal Y.
or Saturdays prices should determine the
amount the sully estate owes? Stt
f. Third. Whether transactions on the
Cotton Exchange are gambling ira sa c.
tions? s,
The opinion Of the referee is that the
case should be reopened.S r.. Judge 4 Holt
decides In his favor this will reopen 7 he!
whole question and If the claims are
decided 1t will make an immense diff ~
proved that Cotton Exchange transactions
are gambling transactions. Sully is sol
vent and will not owe a cent.
\. What Referee Says.
HI Referee Coke, in his report, said
E Il think that the petitioners have %, di-$
rect pecunlary interest in showing II then
Ican, that, upon q proper discriminate Ion
on the law and the facts, there would be
Sufficient assets in the estate to preclude
any right to recovery against them, and
that this is the only proceeding in when
such determination can be had. and that
they must therefore, be held to be par
ties In interest within the meaning OF the
ban kEuptcy act. lgs
~ Large sums Of money, It Is alleged,
were paid by the bankrupts by way Of
margins within four months, and wi thin
avery few days of the bankruptcy and
1t Is not unreasonable that creditors who
have not received such sums should de-
sire to examine to the facts with q view
to ascertain1ng whether such payments
have not been such aas are known as
preferential payments under the bank
ruptcyi act. III does not seem to me in-4
equitable to permit q judicial Investigation
into this matter. LIZ Il
The referee then quoted the rule OF the
New York Stock Exchange which pro
svldes that when a member announces
his Inability to meet his obligations his
contracts shall he settled at the average.
quotations for like contracts on that day;
unless the notice OF the failure Is given
within an hour OF the time Of the clos
Ing of the exchange, In which case the
average quotation for contracts on that
day. unless the notice Of the failure is.
given within an hour OF the time OF the
closing of the exchange, which caso The
average quotation for contracts OH that
day shall be the basis of settlement. The.
referee says the trustee in bankruptcy
and opposing credi tors aver that the Sully.
case of suspension was given after Q r..
m. - while the petit TONERS, on the other
hand claim the notice was sent to the
superintendent Of the exchange by 2 sP.s
NJ. Referee Coke adds IL
Attack Legality Of Rule,
THE petitioners ask to be permitted to
to show that, even under the rule, the!
averag e price at which these cotton con-
tracts should be settled should really be
its average price Of Friday. The average
price of Saturday was very much lower
than the average price OF Friday. The.
bankrupts had on hand a large amount of,
cotton against the contra ts e. there
fore. they were to llquldate these CON
tracts at the higher price for the cotton
would be much less money owing by
them, If anything, than would be owing
by them IL the settlements were made
on the average price OF Saturday, March.
10th. It5is manifest that under this rule.
q tremendous power8is given to the SUI
perlntendent Of the exchange. IT seems
to me that such q rule, fraught with such;
Important consequence to 50 many people.
IL it is to be maintained Mt all, should
be maintained upon a strict compliance;
with It's terms; and that8petitioners here
have an equitable, right to be heard to
show II they can, that 1t has mot been
complied with. and that by such mons
compliance their property rights have
been detrmentally affected. "a.
Counsel for the trustee argued that the
only statements In the petition which
touch upon the illegallty OF the exchange
claims, md the question .of wagering, are
made on information and belief, and,
Therefore, should not be considered, For
the reasons stated ] am forced to the
conclusion that the petitioners here are
entitled to-t The relief they ask. !"
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