Omaha daily bee., 1921-08-02
.Predicanlent of
Ligggett Company
Not Unusual
Situation an Example Of
Many in Which Good Busi-
ness Men Tripped Up i'll
Securities Market.
BY HOLLAND.

li'dl ~ SplittlllltS Hdpl'tlA lldl
man may be possessed of unusual
business ability and yet is over
whelmcd by conditions in the securi-
ties market which he did not fore
see and could not control. 4 consid-
cradle company of men who have
succeeded admirably in their business
activities, but who were tripped up
after entering the securities market,
could be shown to Mr.. Liggett,
teaching him that he is not an eX-
ception.
Another feature associated with
the assignment to trustees of Mr..
LiggettS personal assets is the fact
that, notwithstanding the almost un-'
prccedented drop within d few days
i'll the market price Of the stock OF
the corporation which Mr.. Liggett
created and developed. this corpora
ton is undoubtedly perfectly sound.
Its creator may have collapsed in
business point Of view, but he has
abundant faith in the United Drug
company He was familiar with its
condition. He had what is sometimes
called inside information. His conf
dence III the financial and business
soundness of this corporation led
him to buy its stock continuing his
purchases Notwithstanding a drop
within a few DAYS of some 40 points
and drop OF 80 points within two
days.
Had Confidence In Firm.
n Mr.. Liggett had not been confident
that this corporation was abundantly
strong and IL he had not felt certain that,
however the market may have played with
the stock of this company. nevertheless
the company is so strong that 1t will re-
gain its market prestige, he certainly
would not have bought many thousand
shares upon falling market Had he
been so disposed he might have followed
the example set occasionally by execu-
tives of corporations who had reason TO
know that the market price Of the stock
was TOO high and who therefore secretly
unloaded as much of the stock which they
possessed as it was possible for them to
unload.
Mr.. Liggett. however, continued buying
and this necessitated the obtaining OF
large loans from banks, which accepted
the stock collateral security, Appar-
emily lie has been called upon to pay
these loans or greatly to increase tho
margins, and this lie was unable to do.
What c. =. Huntington Did.
Mr.. LiGgetts embarrassment reminded
some Of the veterans in the financial dis
trict of the experience of c. P. Hunting
ton at the time of the money famine
which followed the panic Of 1893. Some
of the banks at that time were carrying
large loans for Mr.. Huntington and be-
hind these loans stood securities Of tho
Southern Pacific. OF these securities Mr..
Huntington was the owner. The banks
called upon him TO make good the loans.
One of these banks sent note to him
containing a peremptory command. 1t
took the form OF de mand for the pay
rnent Of the loan within "a hours, with
further statement that II this were not
done the bank would throw the securities
upon the market.
Mr. Huntington called at the bank an
hour of two after he had received this
note. He said that he observed that the
bank purposed selling the securities II
the loan not paid.
81 shall be very elad to learn where.
when and how you sold these securities,
for I have got a good many of the same
kind for which have been trying TO
find a market and have been unable to
do so. II you sell these securities ] viii
consider 1t a favor II you let me know
where YOU sold them and now much you
got for them
nv Huntington's obligation was mot r
paid. Not because he was bankrupt, buy
because he could not market any secuSi-
W
was however unable to sell these securi-
ties and therefore carried them until at
last Mr. Huntington was able to take up
the loan.
Mr.. Iiggett's Embarrassment
Mr.. Liggett might have initiated the
example Of Mr.. Huntington. Instead OF
that he has turned over all of his per
sonaI assets 10 three responsible men or
Boston and these trustees will undertake
to make satisfactory agreements WIN the
creditors.
Mr.. Liggett, while still very young
man, gained a fine reputation as sales
man. He not only earned reputation as
p seller for certain patented medicine.
but he also gained experience and A hlnt
Of the lurking possibilities which lay In
a combination of various drug stores AMI
factories. He found financial support
based largely upon the confidence IN niin
was speedily made and in a little while
il attracted attention because it proved to
he one Of the largest and most successful
growing businesses in the united states.
In cooperation with one OF the aniest
OF American business men. John RI. rag
ler the drug company took over another
successful drug company OF Ne" AorK anu
a little later went to England. There
he was able TO complete somewhat pro-
tracted negotiations for the purchase or
he Boots Drug company in England. rms
was one Of tn" largest concerns or tho
kind in the world. 1t ranked among thc
Its acquisition increased the business car.
ried on under the name of the United
Drug company so that at last the aggre-
gate business was considerably In excess
of 100000, coo.
Reputation Unimpaired.
Mr.. Ilggett could not have foras"en the
sudden and disastrous depression in the
sccurities marlVet or have understood that
it would be difficult to secure continued
aid from banks in carrying his stock. But
he did fovesse. apparently, the temporary
depression which was to affect almost all
business He was able with his associates
to float r large issue by the company of
notes or bonds early in the spring. The
very fact that he was able TO do TINS
proves the confidence of the banks
and the public In the soundness nf the
great business which Mr.. Liggett founded
Whatever be the outcome of ms assign
ment OF his personal assets to trustees VINO
will handle these assets for the 9eneth OF
his creditors Mr. Liggetts reputation as
business man will be unilnpaired ne WI.
ne mum lbered among the considerable llst OF
Americans who began with no capltal. put
with energy, foresight and great business
ability by which they were
able to build up very large industries IN
The coi,rse of few years. Mr. ihggetts
assignment at this time reflects some OF
he danressinK business influences which
have greatly enba arrassed many men whose
ability had brought wealth to them.