New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-07-23
His Valuations of Col
lateral Called Unjusti-
fled; Guaranty Trust
Protects Its Interests
Brokers Publicity
Methods Criticized
Market Unaffected, AL
though Failure Is One
of Largest in History

~ silSHI mare OF Indignation, the
calling up in memory of one of Wall
Streets greatest romances, but an un-
perturbed securities market measured
the response in the financial district
yesterday to the petition in bankruptcy
filed by Allan A. Ryan
1t was not much, but still was proof
that Allan A. Ryan, bankrupt, re-
tained something of the power to stir
the minds Of men which he possessed
when two years.ago, with the accumu-
lation of a s3o,ooO,OOO fortune signal
izing an unusual record of achieve
ment, he elected to defy the estab-
lished law and order Of the Street and
failed in the attempt.
The manner of filing the petition
and the revelation it contained of loans
advanced by several OF the leading
financial institutions of the country on
collateral notably insufficient as esti-
mated by Mr.. Ryan, were reminiscent
of the genius for publicity which he
displayed during the long fight he
waged with the Stock Exchange. In
all that conflict he bid successfully for
public opinion as he launched attack
| after attack upon the exchange govern
ors, who, hampered by tradition and
slow to move, were always at least one
jump behind in the public records. In
the showdown they won the verdict,
but during the conflict his open fight
ing had given him an advantage as
they clung to anonymity.
Street Questions His ALLEGATIONS
Mr. Ryan's statement of the loans
made by the banks to him was not sub
iected to challenge yesterday, although
the correctness cf his ALLEGATIONS was
questioned. His attempt at estimat-
ing the present market value of the
collateral securing these loans, how
ever, was a stroke that, for it's daring,
Of shock. They made no effort to
palliate the fact that the record, how
ever interpreted, reflected bad banking,
but they were aghast that the figures
bearing upon the situation should thus
come to light for the first time, with
no intimaticn Of their relation to gen
eral conditions as they .existed when
the loans were made and with what
they regarded as entirely unjustifable
valuations of collateral.
"How can Mr.. Ryan or anybody else
know what the ultimate value of the
collateral will be until it is liquidated 2"
was a question frequently heard in the.
Street.
There was, however, no concerted eff
fort to reply to or correct officially the
The bankers, even as the Stock Ex-
change governors, are by instinct
averse to discussing their affairs for
quotation notwithstanding wrong i'm
preston may have been given. Only
the Guaranty Trust Company issued
statement, marking the single specific
development Of the day, as Mr.. Ryan
and his associates maintained silence.
Potter Speaks for Guaranty
"Attention is called to certain news
paper statements Of the indebtedness
of Allan A. Ryan to the Guaranty Trust
Company, variously placed at $780,
900 and upward" said w. c. Potter,
resident, for the company.
."The facts are that Allan A. Ryan
and Allan A. Ryan & Co. owe the
account principal amount of approx
mately SS4,000,0O0, against which
pledged collateral applies. Cognizance
has been taken of this situation for
more than a year, and in anticipation
thereof reserves have been set up
against this account aggregating S3,
100000.
"While there are loans standing In
the name of the Guaranty Trust COM
pany in excess of the figures given
above, all such loans are held by the
Guaranty Trust Company in it's ca
pacity as trustee or for the account Of
others"
In the absence of Albert H. Wiggin,
president and chairman of the board
of the Chase National Bank, no au-
thoritative explanation of that institu-
tion's interest in Mr.. Ryan's affairs
was available. 1t was ascertained
however, that the banks loans to Mr.
Ryan were in no instance made with
out security, and the opinion was ex-
! pressed that the usual margin required
{, in loans for Stock Exchange purposes,
i. e., 20 per cent, had been stipulated
in their arrangement. The exact status
Of the account was not ascertainable
because the officer in direct charge was
away from the bank. The following
statement, however, was dictated by
Carl ]. Schmidlapp to whom tho in
quiry was referred by Alfred C. An
drews, said to be the senior officer on
duty:
Whatever the situation may be, it
has been provided for"
Neither Gates w. McGarrah, chair