Evening journal., 1920-04-03
MAY COMP PROMISE
IN STUTZ ROW
Ryan May Reach Agreement
With Stock Exchanges
Before Monday
LAWSUITS LIKELY
AS AN OUTCOME

NEW YORK, April 3.-Possibnity Of
compromise between the Stock Ex-
change and the Alan A. Ryan interests
was discussed by the few brokers who
visited their Offices. Unless the three
day holiday brings forth a settlement.
1t is generally agreed that the situation
next Monday would be the most en-
barrasslng the Stock Exchange has ever
faced.
The Stock Exchange in late years
has boasted that the old methods Of
fcut-throat finance had given away 70
higher ethics in the street. Every d.
fender OF The Stock Exchange has been
insistent that under the new condi-
tlons a corner" is impossible. BY its
action In suspendlng trading In Stutz
Motor The board OF governors publicly
admitted that this stock had been cor
nered. Conservatiev brokers fear that
the situation IS likely TO arouse an
other strong public demand for pub
ilc supervision Of the exchange.
The action OF Alan A. Ryan in having
the board OF directors of the Stutz
Motorcar Of America declare an. $1,000
share stock dividend at a meeting today
was regarded as strengthening his posi-
tion in the action he has taken in de-
flying the Stock Exchange. The inn
mediate effect Of the action, It was
pointed out, was to make more uncom-
Portable the position Of those who are
short Of this stock
The new stock dividend, together
with the stock dividend Of 10000 shares
previously declared and payable TO
stockholders Of record Monday, doubles
the number OF shares OF Stutz. Unless
settlement is made within year
those who are short Of the stock will
be required to deliver two shares for
each one they are now short. With the
last official quotation on stub at 1891
a share. the strength OF Mr.. Ryan's po-
sition Is apparent, especially when con-
sideration is giyen TO the undispuicd
reports that he has certificates or con-
tracts for more than the total 100000
shares OF stock which have been is
sued by the company.
No one could be found today who
would venture an opinion as to the
status of Stutz Motor stock Monday.
With the stock dividend OF one share
for each Ave due to stockholders Of that
date. Is was held by many that the
shorts would be Immediately liable for
the value Of this stock dividend This
would mean that they would have to go
into the market and purchase one ex-
ira share for each 1--WE shares they are
short or pay over In cash the market
value OF the share. With trading in the
stock suspended on the exchange, on
the curb and in the Consolidated Ex-
change. there was some question as TO
where this eStrs share OF stock might
be procured or how the market value
Of a share could be determined
Possibility Of numerous lawsuits to
enforce contracts 10 deliver Stutz stocks
appears imminent unless a compromise
Is reached. The suspension OF dealings
In the stock operates to create mora
torium on these particular contracts so
FAR as the stock Exchange is concerned
but It does not alter the legal charaf-
Ter OF the contracts which can be en-
forced In the courts II purchaser
wants TO go over the head Of the Stock
Exchange governors.
Sentiment generally approved the ae-
lion OF ne board Of governors IN sus-
pending dealings in the stock a'ho"Th
there were many who decl3r d that the
action should have been faken sooner
Those who criticize the board Of sv-
crnors for tardiness point ont That on
February 10, when the annual report
OF ihe comnany was made public the
book value" OF The stock as Indicated
bv the comnanv's surplus December 81.
1919 was but 81 which was h'gh con
slderiug that the earnings for the
year were less than 100000.
In the first 1--WE days OF March there |
were less than 20cO shares OF the stock |
traded In. yet the security advanced |
rom sti5 to si25. In the next 10 I
GAYS. on daily trading, ranging between I
~" and 1000 shares the stock scored !