New-York tribune., 1908-08-26
4. @. BROWN & co. FAIL
AFFAIRS IN Il TANGLE.
Could Not Deliuer Stocks Bought
in Saturdays Big Dealings.

Co, which was the Ch1ef ngure III lile remain
a, lie operations of that day, yesterday Informed
the authorities of the exchange that IL was uh-
able to meet its contracts and its suspension
immediately followed For three hours after
the opening of the market the firm made des-
perate efforts to meet the enormous oblSatlons
it had incurred Saturday, when, according 10
the statement of one of the members IL hau
traded in 900 shares. The direct cause OF
the failure the inability of the firm 10 oe-
liver thousands OF shares of stock it had SOLD on
that day Brokers who had bought this stock
were cIamoring for it as the market
opened and when it not forthcoming they
proceeded to buy 1t in under the rule at the
expense of course of A o. Brown & Co In
addition it was said, certain banks refused to
certify the checks of the firm, owing TO the dam
age its credit resulting from the disclosures OIL
its alleged transactions in Saturdays market
A member of the firm said that its affairs were
badly tangled that it was Impossible TO give
even an estimate of its liabilities, but from the
fact that it had delivered only 2iI,Wo shares out
of total of 10000 traded in on Saturday, 1t
was estimated that it owed at least S2,oooUo-
John w. Rhoades. cashier Of the firm, was ap-
pointed assignee and d. W. Noel, OF NO.
Broadway, attorney for the assignee
NOT so BAD AS EXPECTED.
The immediate effect of the announcement of
the firms failure, which came rather as sur
prise to Wall Street, notwithstanding the fact
that it was known TO be far behind in It's dellv-
cries was much less violent than might have
been expected There q. decline of from
to . points in of the active stocks as
soon as the news came out, and an advance IN
others. Later prices advanced again TO about
the prices quoted Immediately before the fail
ure. due. Of course. to the fact that brokers TO
whom the firm had been unable to make de-
liveries were buying in the stocks for its ac-
count What regarded as the most sur
prising feature of the market that prices
advanced SO little a result of this buying.
which must have amounted to several thousand
shares Well informed brokers said the reason
the market did not shoot UP that the big
interests behind it did not want to see any more
failures. and supplied all the stocks needed
The firm of A O. Brown & CO. enc of the
largest and best known brokerage offices IN
Wall Street 1t organized on November s,
1902 and in short time built up large COM
mission business. 1t the one house that
has been expanding while others have con-
tracted, and did the biggest branch office bust
ness of all the houses in the Street The firm
took over many Of the Gates branch offices
when that firm liquidated about YEAR ago. and
has handled large amount OF the old Gates
business. 1t is said also, that A O. Brown, the
head of the firm, who formerly secretary
of the American Tobacco Company. has handled
heavy speculative orders for the account Of the
American Tobacco crowd. which years ago was
of the biggest lots of Spectators in the
/ Street
SHORT OF THE MARKET.
The Brown firm is known to have been heav-
lily short of the market for some time. and in
we'll Informed quarters it said yesterday
that its short interest on Friday amounted to
f,I, o,,S tho Oh. nd
the generally accepted theory of Saturdays
wild market is that the firm, in effort to co'e
its short interest. endeavored to demoralize
prices through tremendous selling orders Their
plans said to have miscarried, through the
unwillingness of many houses to execute their
orders and through the support of the market
by the Hartman Rockefeller interests viii n
carried prices to a higher level than Satur
day and made it impossible for A. o. Brown &
Co. to deliver the stocks they had sold.
! This theory OF Saturdays opera tiOns
garded as the correct one in banking circles.
one prominent banker, who is high in the coun
ellis of the governing committee of the Stock
Exchange, said that the week-end's pungins
was undoubtedly the last desperate effort of
the firm break ,he market and cover its
short account He said that. according TO his
information. the firm still had short account
of 1JOW0 shares cover. He added that the
firms credit was very poor with the banks and
its call loans were always called quickly
mother prominent banker in speaking of the
matter. said that Friday last the firm of A O
Brown & Co entered into an agreement with
the Standard OH Hartman interests by which
the latter agreed to supply at the market price
then all the stock needed by the firm to cover
its short account of 2.0.0I shares. Not salts
field with this however. he said. the members
of the Brown firm thought they had a good op-
nortunitv on Saturday shake out the long
count by further depressing prices. and in this
way do the Standard oil party. Instead of
succeeding in their attempt. the banker added.
they ran UP against buzz saw. and were them
selves put in q hole from which they found it
impossible TO extrcate themselves
LAWSON SAID To BE IN IT.
In other quarters it was learned that a. o.
Brown & Co. had great many customers who
could swing one hundred thousand shares of
stock each and that one Of their leading clients
was the head of prominent uptown trust COM
pany. and that he had been very active on the
hear side in Saturdays operations There was
considerable guessing to just who the inter
ests were who had been operating through A o.
brown &, Co. Thomas w. Lawson the man
most frequently mentioned in connection with
this D. G. Reid. of the Rock Island Company.
and Charles w. Morse were also spoken of as
customers of the firm
When T. F. Buchanan the managing partner
of the firm was asked regarding the truth of
these reports after the failure he said:
II do not know Mr.. Lawson. None of the
other members of the firm know him. We have
never seen him done any business with him,
and we would not do any business with him =
He also denied that Mr. Reid or Mr.. Morse was
a customer OF the firm In regard to the latter
baS bte n