New-York tribune., 1908-08-26
A. @. BROWN & co. FAIL
Continued from first page.

been doing business for Thomas w. Lawson u
G. Reid or some of the other gentlemen whose
names have been mentioned in connection with
our affairs ] hope to make full and satisfac-
tory explanation of position very soon
so far I able TO see. there is no imme-
date cause for apprehension over our tempo
rary embarrassment, which is due to technical
rather than general causes"
When asked whether members of the firm had
been speculating themselves and We're short OF
the market, Mr.. Buchanan uttered an emphatic
Nor To the question whether or not 1t was
that big customer had laid down on the
firm, Mr.. Buchanan replied with expressive
shrug of his shoulders and said that professional
courtesy toward his clients prevented his an
swering.
SAY THEY WON'T GET BACK.
Mr. Buchanan's statement that the firm ex-
pected to resume shortly was not taken seriously
in Wall Street. Men in position to know what
they We're talking about said that the members
of the firm would never get back on the ex-
change, even If they paid in full They
added that the investigation started by the
governing committee OF the exchange would un-
doubtedly have resulted in the suspension OF
the firm for their tactics Saturday, and that
they had simply hastened matters by announc-
ing their inability to meet their contracts.
At the Stock Exchange It said that tho
failure of A o. Brown & Co. would not have
any effect on the investigation regarding the
transactions the exchange last Saturday. in
which several other firms besides A o. Brown
& Co are involved. r. H. Thomas, president
of the exchange, has not yet announced the
committee OF five that is to conduct the investi-
CATION but il is understood that he will do
to-day.
According to reports circulated in Wall Street
Yesterday some of the other firms which partici-
pated In the market manipulation Saturday
are in difficulties, and it was said that at least
one large house was likely TO suspend to-day.
These rumors were. however denied in banking
circles well informed the situation
In the boom times, two years ago, the firm OF
A o. Brown & Co headed syndicate which
foated the Santo Domingo Gold and Copper
Mining Company, with capital of S65, 100000
The company supposed to have very valu-
able gold and copper lands in Santo Domingo,
and the firm induced many of its customers to
subscribe to the stock After a great deal OF
stock had been sold the company's engineers
reported that the alleged gold and copper mines
contained nothing more valuable than salt.
TAKES BACK MINING STOCK
The Brown firm then announced that 1t would
take back at the cost price, plus per cent In
terest all the stock which it's customers had
purcha sed on the firms advice. This announce
ment was made just prior TO the panic last fall.
and the stock was taken back and the money
paid over to the holders last January. This
about S6.OO0.0OO.
The firm also implicated in the failure OF
Whitney. Stephenson & Co.. members of the
Pittsburg Stock Exchange. which occurred in
the post-panic period. The Pittsburg firm failed
chiefly account of its ENHANCEMENT with the
Whitney company, a big waterpower concern,
with $10.OOO,OOO stock and S4,oOO,OOO bonds
which has mammoth dam and power plant in
North Carolina. A o. Brown & Co. underworld
the bonds Whitney, Stephenson & Co.
loaded down with the securities of the Whitney
company, which unmarketable In the panic
days When the Ptttsburg brokers failed A. o.
Brown &, Co. had TO take lot of Unmar-
ketable assets, but member of the firm said
last night that A. o. Brown & Co did lose
a dollar through this transaction. 1t is certain.
however. that great deal of capital was tied
up. The Whitney company is at present in the
hands of q receiver.
The members of A. o. Brown & Co. in addi-
ton to A O. Brown and E F. Buchanan. are
G. Lee Stout, Lewis G. Young. Samuel c. Brown
and w. Rhea Whitman A. o. Brown and Mr..
Young members of the Stock Exchange.
The firm conducted general stock. bond. grain
and cotton business and had branches in Chi
cago, Toledo. Toronto. Buffalo Cleveland De-
troit and Utica in addition to half a dozen
branch offices in this city. Prior to the panic
had branch offices in score of other cities. but
these were closed last winter. In addition TO it's
two memberships in the New York Stock Ex-
change the firm a member of the New York
Cotton Exchange. the Chicago Board Of Trade
the Chicago Stock Exchange and the Cleveland
Stock Exchange.
The firm maintained --fvate wires to all its out
OF town branch Offices at a cost of over $4,000 |
year. Its large main offices at No. 80 Broad |
street cost $50,OOO a year in rental, and its
branch office in the WaIdorf-Astoria cost $50
600 Its other local branches were at the Hotel !
Plaza the Hoffman House. in the F1atiron
Building at Fifth avenue and 34th street and at
No. East 44th street. The offices at the Wal
dorf were particularly lavish scale and
for several years the firm had large private
suites for the use of the customers who patron
lied this office.
BUCHANAN'S METEORIC CAREER
Edward F. Buchanan, the managing partner
of the suspended firm, has had a meteoric
career. Ten years ago he a telegraph oper- .
ator in the South making 81 day. He came
North went to work for the Western Union and
soon obtained place with brokerage house.
After working in half a dozen offices he went |
to work for c. l. Hudson & Co. for S25 a week. !
A. O. Brown was at this time partner with /
c, l. Hudson & Co Mr.. Hudson. the senior
partner, went abroad and left Mr. Brown in
charge of the business. Mr. Brown soon recog-
nzed that Buchanan the telegraph operator.
was a valuable employe. and he promptly
Jumped his salary to 500 a week When Mr.
Hudson returned he did not approve of the
rise and as a result Mr.. Brown withdrew from
the firm taking Buchanan with him, and formed
the present firm of a. o. Brown & Co. with
of