New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-04-16
Made
For. Settlement
In Stutz Corner
Committee of Five to Adj
just the Price So That
"Shorts" May Surrender,
Is Suggested to Ryan
Stock Traded on Curb
Exchange Opposes Move
for incorporation Urged
by Opponent in the Fight

short contracts in Stutz motors were
made to Allan A. Ryan yesterday by
interests representing those unable to
obtain the stock tor delivery except
on terms dictated by Mr.. Ryan. Up
until late in the day it was said no
terms of settlement had been agreed
upon.
AS officials of the Stock Exchange
dsclaimed any knowledge of the nego-
tiations, it was assumed they were
started by representatives of the COM
mittee of members Of the Association
of Stock Exchange Firms organized to
act in behalf of those swho had sold
short before Exchange dealings were
suspended.
This committee, of which Charles A
Morse is chairman, is conducting an
investigation of the Stutz corner" on
its own account. 1t was said by a mem
Der that the inquiry thus far showed
that fifty-eight firms we're short $500
shares, presumably for customers. Of
these it was said forty had joined the
committee in its efforts to help the
shorts out of their dilemma. Figures
previously submitted at the Stock Ex-
change indicated that the short inter-
est in Stutz was between 10000 and
$4,000 shares.
Would Arbitrate Differences
One suggestion yesterday was that
the differences between Mr. Ryan and
those who unwittingly sold stock to
him without having the actual shares
to deliver be adjusted by commit
tee of five appointed to fix n settlement
price. 1t was proposed that two men,
bers of the committee represent Mr..
Ryan. two the shorts, with the fifth
to be selected by the parties to the con-
troversy.
The suggestion that the Stock En-
change be incorporated to prevent re-
currence of a situation similar to the
Stutz incident was warmly Endorsed by
Mr. Ryan, who issued statement
which reads
retrospective of my controversy with
the New York Stock Exchange, ire
spective of the treatment Of the Stutz
Motor Car Company by the New York
Stock Exchange, irrespective of the IN
fair treatment to the Stutz Motor Car
Company and it's stockholders. most
seriously advocate the incorporation Of
the New York Stock Exchange to be
governed by law for the good of the in
vcsting public" He suggests the fol-
lowing steps in the situation:
"Restoring a market to Stutz stock
holders by ending the irresponsible
jurisdiction of the New York Stock
Exchange.
insisting upon the recognition of
the. sanctity and inviolability of a
Stock Exchange contract.
Authority to Suspend
"The reluctant admission that the
Stock Exchange had no right or au-
thority to suspend trading in Stutz
stock, which lack of right is shown
by the proposed amendment now to
acquire that right for the future.
Recognizing the first principle of
JUSTICE, that party in interest has no
right to sit as judge in his own con-
troversy, which principle, owing to my
light, was finally recognized at the
beard of governors meeting yesterday,
when they for the first time excluded
those who represented Short inter-
est
to the talk Of Incorporation was that it
would not result in further protection
to the investing public.
All arguments advanced by those
who advocate Incorporating the ex-
change said prepared statement,
are based on the assumption that such
incorporation would act further to pro-
tect the interest Of the investing pub
lie. Following the special message of
Governor Sul2er, afterward impeached
and removed from Office, serious at
tempt was made at Albany to force
incorporation upon the exchange in
titled An act to amend the banking
law in relation to reorganization and
regulation of exchange corporations
The purpose of this act was really to
amend the banking law so as to compel
the Incorporation of the New York
tSock Exchange.
Disprovcd Contentious Before
"The Stock Exchange successfully
disprovcd in committee hearings the
contentious Of those advocating the bill
on Tho, ground that, although the bill
was designed to protect the public
through the substitution of the police
power Of the state for that form of
internal regulation SO long exercised
by the exchange over it's members, the
bill would actually have the opposite
effect. The exchange has power to dis
cipline member for any act contrary
to just and equitable principles of
trade much broader power than could
be conferred by any legislation. The
prolonged and tedious litigation through
the courts to which an accused mem
Der would have recourse under incor-
poration would sacrifice the safeguards
which the public now are assured
through prompt and summary punish
.nent b. the exchange itself.
'"rhe exchange further contened it
to be obvious that such a substitution
would lower the whole tone of the in
stitution and radically impair it's
standards. Wry, asked the exchange,
should the public, through their
brokers, be compelled during years of
litigation to make contracts. for large
sums of money with an interruptions
member whose very solvency might be
impaired while the case hung fire in
the courts? This is precisely the con-
diton that the proposed bill would
force upon the public.
Already Subject to Laws
ut was further urged by tue er.
change that the exchange and it's meu-
bers arc already subject to all the laws
governing prohibited acts; and are
quite as amenable to the laws Of the
land as other persons and organiza-
tons. Therefore, it was difficult to
see wherein any advantage in the way
of Drufpction would ba h,j ,,,oco, :,