The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

604 APPENDIX consciously try to bring on a corner in order to extort very high prices from traders who are short of the stock. In this case they will usually wish to halt lending of the stock, and indeed purchase further amounts of it at exaggerated figures in order to secure the corner. The Stock Exchange has several methods of proceeding in such cases provided by its Constitution, including the deferring of deliveries on sales and the power of establishing settling prices. But in extreme cases, it can always strike the stock from its list, on the basis that the “free and open market” for the issue has effectually been destroyed and that further Exchange trading in it would represent only manipulation and unfairness. In the early history of the New York stock market corners were fairly frequent phenomena—mainly because stock issues at that time were generally so small. Like money shortages, corners have become infrequent with the passage of time, which has brought with it larger issues and better market organization. Probably the most famous corner in the history of the market occurred in Northern Pacific in 1901. So famous was this episode that details concerning it need not be repeated here. Since the war there have been only two serious corners on the Exchange—that in Stutz Motors in 1920, and that in Piggly Wiggly Stores in 1923. A brief résumé of each will be given here. The Stutz Motor Car Co. in 1920 had 100,000 shares of capital stock, which were listed on the New York Stock Exchange. The Business Conduct Committee, noting the character of trading in this stock, called before it Mr. Allan A. Ryan of the Stock Exchange firm of Allan A. Ryan & Co. Mr. Ryan stated that he owned 80,000 shares of Stutz, and that he and his family, friends and associates owned or had contracts calling for tht delivery to them of stock aggregating 110,000 shares—or 10,000 shares more than the company’s total capital stock. The Committee informed Mr. Ryan that he alone was in a position to put an end to this corner, and must take whatever steps were necessary to do so. Subsequently Mr. Ryan stated prices at which he was willing to settle, varying from $500 to $1,000 a share. Since the Committee knew that a corner existed in the stock (which the public did not necessarily know), and that a free and open market for the stock no longer existed on the Exchange, to protect the public it followed its usual procedure in such cases and suspended dealings in the stock on the Exchange. This suspension of dealings did not of course affect the legal rights of the parties under any existing con- tracts. Settlement of these contracts occurred outside the machinery

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