Los Angeles herald., 1908-08-26
BROKERS' FIRM
GOES TO WALL
A. 0. BROWN & co. SUSPEND
ON EXCHANGE
INVESTIGATION OF STOCK DEALS
LEADS TO FAILURE
Remarkable Transactions Of Last SAT-
urday Explained Under Probing
and Crash Of One Of Largest
Concerns Follows
.con.,uued from rage Onsl

eoontsuued from faxe Ons,
Of 1902 the firm had come to take an
important part in trading on the STOCK
exchange floor.
John w. Rhoades. cashier OF the
firm, was named as assignee Will -
w. Noel as counsel
Affairs Badly Tangled
when the failure was announced
member of the firm said IT'S aHaArs
vvara IN a badly tangled condition as
the resI1lt of Saturdays trading, and
that 1t was thought best to make an
assignment at once. 1t is understood
that brokerage firms who were await
ing the delivery of stock from A, -.
Brown & Co. became impatient along
toward noon today and sent Woro tnal
they would allow but few more nours
of grace. All attempts to secure lur-
ther delay were futile ana the sus7
pension followed.
It also was said the banks that car
ried the accounts of the house declined
today. because of the unsettled conol-
fion of the affairs of the firm, further
to certify any of its checks. one OIL
the managers for the house wnen ques-
toned as to this dismissed the subject
nv saving the firm had asked for no
certifcations. Less than an hour De-
fore the suspension and when enorts
were being made to stave OH the de-
livery of unpurchased stocks, the hrrn
announced that its business was pro-
ceeding in an orderly fashion ana tnat
any suggestion as to its financial stand
ig was ridiculous.
declare tonight that the collapse was
due entirely to the clogging OF It's reg
ular channels of business by the ex-
traordinary Saturday buying. A tnou-
sand clerks, it was explained, could
not properly enter and transfer the
7s0 900 shares handled by the trm on
Saturday within the space OF time al
lowed bv the exchange rules for maxi
ing deliveries.
Called Before Governors
Albert o. Brown, the head Of the
firm. was before the stock exchange
governors Monday afternoon to explain
tardiness of delay and It was an
nounced afterward that his explana-
tfon as to this feature OF the trading
had been accepted. 1t was further an
nounced that the governors OF the ex-
change would appoint commission OF
five to thoroughly inquire into Satur-
days transactions as means or re-
storing public confidence. and would
punish any members who had been
guilty of a transgression Of the rules.
The personnel of the committee had
not been announced when the failure
of Brown & Co. became known, but
it was said events of the day had
In no way changed the purpose OF the
governors.
Saturdays trading will long be re-
Tnemhered in Wall street. With the
opening of the session of the exchange
there was an almost immediate plunge
In the shares of a few active favorites,
and in a little while the ordinary units
of sale were raised from 500 and 1O00
shares to 5000 and 10000 share lots, and
1t seemed for a time as though the
few brokers participating were playing
q game with so many pieces OF paper
In all this wild furry of buying and
selling of shares whose face value
amounted to millions of dollars, there
was little or no change in the prices OF
the securities so freely handled.
Suspicion of manipulation and of the
ssrnatching" of orders was aroused anc
there was more satisfaction than sur
prise when the governors of the ex-
change met on Monday to institute an
inquiry.
Members of the suspended firm early
in the day declared there was nothing
extraordinary In their trading or
Saturday. The fact that the stocks
they dealt in showed no great change
OF prices, they declared, bewildered the
followers of the market and brought
about the widespread comment.