New-York tribune., 1920-04-08
'Change Firms
Unite to Save
Stutz Shorts
Is Wall Street Houses
Plan Appeal to Courts
if Ryan Refuses to Make
Priv vate Settlement
Block Brings SOL Share
Sale at Public Auction
Emphasizes Dilemma of
Victims of the Corner

Failure of the Stock Exchange au-
thorities and Allan A. Ryan to agree
on terms under which the shorts in
Stutz Motors can cover their contracts
was followed yesterday by the banding
together of fifteen exchange firms for
the purpose of acting in behalf of
customers who are said to be short
10000 shares of Stutz stock. This
group Of brokers, it was learned. has
engaged the services of one of the
leading law firms in the financial dis
trict, which is expected shortly to ap-
proach Mr.. Ryan with a plan involving
a private settlement.
In the event of Mr.. Ryan's refusal
to negotiate with the lawyers repre-
senting the brokerage interests, it was
said that protective committee would
then be formed and that the entire
matter would be thrashed out in the
courts
The chief allegation of the shorts, it
was stated, would be that Ryan and
his associates had deliberately bought
large blocks of Stutz stock with the
main purpose in mind of trapping the
shorts by cornering the supply.
Block Sells at SOL a Share
The dilemma in which the shorts in
the stock we're placed by the recent
development was further emphasized
yesterday by the sale of block of 200
shares at S70l share at the public
auction rooms of A. H. Muller & Sons
The stock was bought by Feiner &
Mas, lawyers, at 100 Broadway, who
said they acted for a client. whose
name was not divu!ged. Inquiries as
to whether the transaction represented
the buying in of short stock eiicted no
information.
Bidding for Stutz shares at the auc-
tlon rooms began at $400 a share. the
price at which it has been quoted since
the ban on trading was put into effect
by the Stock Exchange last Wednesday.
Subsequent bids carried the price up to
$500, and from that point it rose to
$701. A crowd of two hundred men
gathered around the auction block, and
when the stock was sold at the top
figure few remained to bid on the other
offerings.
The successful bid was 31O points
above the high price made on the Ex-
CHaiPe March 81, the day before trad
ing was suspended. The shares sold at
auction, it was announced, carry the'2O
per cent stock dividend, payable to
holders of record on April g.
Exchange Governors Meet
The governors of the Stock En-
change, at a special meeting on Mon
day. fatty rejected the proposal of Mr..
Ryan for a settlement Of the short con-
tracts on the terms submitted by him.
One of the governors who attended that
meeting said yesterday that the ban on
trading in the shares would be con-
tinued indefinitely until Mr.. Ryan was
ready to make a compromise and &C
cept terms dictated by the Exchange
authorities.
The ruling of the Exchange that the
shorts in Stutz cannot be called upon
to deliver the stock while the ban on
trading continues in force was upheld
in an opinion rendered by the law firm
Of Dos Passos Brothers, of 1875 Broad
way, that existing short sales contracts
are unenforcablc
Governors Of the Exchange held
special meeting yesterday afternoon,
but it was said the Stutz incident was
not discussed. Mr.. Ryan left the city
in the afternoon for few days vaca-
ton.