The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-12-23
STO%CKSLUMpBREAK TRADERS
ARNOLD LEO & 90. HAVE TO GIVE
UP AT WEEK'S END.

Violent Break In the Market Follows An
nOunccment OF the suspension Great
Northern Lost ! ~ Points for the
DAY. y. p. q I-2 and Reading 8 l-7.
failure that is considered by Stock
Exchange men as seconl only to that Of
i. VI. Ceb' Hos 4 Co. in imT ortance among
the failures of the year WAS announced
half an hour before the close Of the market
Yesterday. The susE ended firm il Arnold
leo & Co., a house which hes enjoyed
good 81 n,.ing for more than twenty years
AMI which had two Stock Exchange mem
hers and branches in Harlem. The Bronx
ami PhiladelT hia. The firm had a high
Standing and did a very large and very
active business.
Louis V. Hubbard, a lawyer st 81 William
street and assignee of the firm, after a
cur,ory examine ton said thFt the failure
was due so the stringent con. iticn OF the
money market" He considered it insdvis-
able. in view of the short time permitted
him for inspection OF the books, to make
m estimate of the liabilities. Sales unC er
the rules after the announcement Of the
firms susr ension, he said, made il i'm
possible to compute yesterday the o
of the losses.
ArnOll Leo, Une SENIOR mernDer OF the
firm, was admitted TO the Stock Exchange
IN 1859. Before the organization of the
firm earring his name he was a partner
Of the father of Harry Content Of H.. Content
4 Co. In the firm Of Arnold Leo 4 Co.,
which was established in 1891, he remained
n Stock Exchange member until 1904, when
Re transferred his seat to his son, Edgar
T. Leo. The other member of the firm
Is Robert f.. Gowen Of Philadelphia, who
was admitted to the Stock Exchange in
1899. Mr.. Gowen was a member of the
Philadelphia firm of Smith a Gowen. The
business of this house was taken over by
Arnold Leo & Co. about a year e and
Smith 4 Gowen has since been the Phila-
delphia branch Of Arnold Leo * Co. .
Arnold Leo has been in Ill health for
many months. and though he has continued
10 he senior member of the firm most Of the
business has been in charge OF the other
partners. Mr.. Governs headquarters were
in Philadelphia and those Of Edgar F. Leo
IN the main Office at as Broadway. f. c.
Cumen had charge Of the Harlem office at
202l Fifth avenue and w. s. Wallace Of
the Bronx office at 05S East 149th street.
IL was widely reported in the street that
the Philadelphia house was instrumental in
bringing dDOuJ tDc IdlluTt, ndVIuR unbN-
pectedly drawn heavily on the home Office.
Both the assignee and members Of the firm
denied this report very emphatically.
Neither the operations OF. the Philadelphia
house nor those of any other branch, they
said, were more chargeoble with the loss
than were the transactions Of the main
Office itself.
1t was also denied that the suspension
--oa H.. a. thA fnyI-.o - ru
to make good their margins, which was
another widely circulated report. The fail
IRE was attributed to large individual or
firm operations for the account either Of
the firm or of individual members of the
firm.
Yesterdays violent break in Reading,
an employee Of the firm said. had very
little to do with the failure. But that the
firm had had transactions in other high
priced stocks was not denied. The losses
were particularly heavy in Northern Pacific
and st. Paul.
Entirely apart from stock market opera
tions for the account OF the firm IL was
stated very positively that the firm had
suffered severely from the calling OF loans
by the banks and from demands for addi-
tional collateral to replace that DEPRECATED
In market value since the great Northwest
melon cutting began. All the loans at the
banks, the assignee said, were amply Sc
cured. though the heavy decline in value
Of the collateral had made necessary the
pledge of many Of the firms quick assets.
An indication that the managers OF neither
the Harlem nor the Bronx Office had
knowledge that the failure was impending
was Afforded by the arrival Of messengers
from the Harlem and Bronx offices an
hour after the failure with notes emitting
them to the customary Christmas bonuses
Members OF the firm were OF course obliged
10 refuse the warrants.
Immediately after the suspension OF the
firm was announced on the Stock Exchang e
there was a violent break in the market,
which carried Great Northern to a loss
Of ~ points for the dav, Northern Pacific
TO a loss Of 81 points, Reading 81 points,
st. Paul ~ points and Union Pacific "a.
There was heavy liquidation on h part
d brokers holding stocks for the account
Of the SUSPENDED firm. 1t was principally
on account Of losses from these sales unde
the rules that Assignee Hubbard was un-
able TO estimate the liabilities.
Before the failure was announced there
were reports. in addition to those current
for several days, OF very heavy losses on
the part OF large traders. Christmas time,
II was said by bankers n brokers both,
marked the end Of a season which had
been almost without exception disastrous
10 traders. Yesterdays reports centred
principally upon two OF the very largest
operators as heavy losers in Reading.
Assignee Hubbard has called a meeting
NJ creditors of Arnold Leo 4 Co. for next
Wednesday. Members Of the firm, he said,
had assured him Of their ability to resume.
In addition Mr.. Hubbard gave out this
formal statement:
Arnold Leo a Co. nave made a general
assignment to me for the benefit OF their
creditors upon terms that all their creditors
shall be treated exactly alike. The as
signee has communicated with the various
creditors to the effect that he desires to
meet them at the offices Of Arnold Leo
&Co., As Broadway, Wednesday, December
%, at 5 p. NJ, by which time he hopes to
be able 10 explain adequately the situation
In which the firm finds itself. At this time,
he says, the cause Of the failure seems TO
he owing TO the stringent condition Sof the
money market. He hopes that a plan
may be arranged whereby the creditors
will he paid and the firm resume its bust
ness al an early day"