The New York herald., 1922-10-18
AMERICAN COTTON
RECEIVERS NAMED
Exchange Lately Convicted
of Bucketing Again
in Court.
INSOLVENCY Is DENIED
Former President Graham
One of Two Petitioning
Creditors.
NEW RIVALS ATTACKED
Petition Recites History of
Legal Reverses Before
Collapse.
NEW RIVALS ATTACKED

Justice Robert F. Wagner yesterday
appointed the Hudson Trust Company
and Henry Schneider of SAP Fifth ave-
nue receivers of the property, credits
and assets of the American Cotton Ex
change, Inc, of 81 Broad street, which
in June was convicted and fined $4,000
for permitting members to bucket"
orders. Trading on the floor of the
exchange was suspended last month
pending a decision from the Appellate
Division on this conviction.
The receivership comes as the latest
in a series OF business reverses and
legal actions which followed District
Attorney Banton's investigation of
the conduct of the exchange in Feb
ruary. Papers submitted to Justice
widespread newspaper publicity" fol-
lowing the indictment of the Ex-
change, the conviction. a rapid de-
cline in trading and the rise of COM
petitors as factors contributing to the
present position of the organization.
Trading, for example. is said to have
declined from 2.O24.65O bales in Decem-
ber. 1921, to 10000 ir August, 1922.
Other statements say kat the Treasury,
which prior to the investigation and in
dictment had approximately $4,000 and
a monthly income of about 100000 from
trading fees, has been depleted to ap-
proximately $1,000 in cash.
Act to Preserve Assets.
The receivers were appointed on the
application of James S. M-ng of so
Broadway. and Augustus W. Graham.
former president of the exchange. Both
alleged that their action was to pre-
serve the assets of the corporation ito
the end that such assets NAV be equit-
ably distributed among ths claimants
thereto" Although the exact value of
these assets Is unknown to Mr.. Meng and
Mr.. Graham. they allege that with the
equity in the Exchange Building the as
sets will be equal to or exceed the liza
Utilities" They state that the action is
rot based on the ground of insolvency.
Mr. Meng participated with a claim
Ter $677.SO. assigned by Ingle. Inc. law
printers. of 165 William street. Mr.. Gra-
ham said he has a claim for about $40,
unpaid salary since August.
Their complaint is replete with de-
tails. principally financial and regal.
which have accumulated in eight
months. The exchange was organized
IN 1918. Prior to March, 1922. from 90 TO
20 of the 600 members are said TO have
been active brokers on the floor OF the
exchange, and before the conviction in
June the exchange claimed to be the
only odd lot cotton future exchange in
existence.
Since June Mr. Meng and Mr.. Graham
allege that two similar organizations
have been formed. To the Odd Lot
Cotton Exchange OF New York IL is
claimed much business has been trans
ferred which formerly went to brokers
belonging to the American exchange.
Competitor in Field.
Early this month. the complaint al
leges, the National Stock Cotton and
Grain Exchange. Inc. appeared as a
competitor. This organization is said
to have been in posse sson of property
st ST Broad street for trading since
October 4, when certain directors tried
TO lease for o term of years the trading
floor. trading ring, board and other
equipment.
Mr.. Meng and Mr.. Graham allege that
the National Stock. Cotton and Grain
Exchange has no substantial member
ship or financial standing and is being
maintained by two men who were ex-
, PEELED from the American Cotton Ex-
change two years ago. They also charge
that the National Exchange and Cooper's
Financing Company are controlled by
zone Cooper" president of the former
organization. These companies arc said
20 claim the ownership OF 600 ana 276
memberships in the American. respec-
lively. The validly OF these certificates
which were awarded to Joseph G. Cooper
and other relatives in July by Justice
Erlanger. is disputed by the plaintiffs.
who claim that none Of the membership
certificates was issued and that they
do not represent membership.
No objections to the application for
receiver were fled by Albert Massey OF
100 Broadway. attorney for the ex-
change. who admitted in his formal an
swer that "the material allegations of
the complaint are substantially irue and
correct"
The bond for the receivers was fixed
BY Justice Wagner at $4,000