APPENDIX 
605 
of the Exchange. Ultimately the stock was stricken from the list, and 
Mr. Ryan withdrew from membership in the Exchange. 
The corner in Piggly Wiggly Stores Class A stock was obtained, 
not by a Stock Exchange member but by the head of the company, 
Mr. Clarence Saunders. The Business Conduct Committee investi- 
gated the distribution of the stock among its member houses, owing 
to peculiarities in the price movements of the stock, which was being 
sold by the company outside the Exchange at prices below that ob- 
taining on the Exchange. The answers to the questionnaires sent 
to Exchange members accounted for only 39,802 out of 200,000 shares 
altogether; of these 33,025 were held by Mr. Saunders and other 
directors of the company. The amount of stock due on loans and 
open contracts was 13,662 shares. Mr. Saunders declared to the Ex- 
change his intention of maintaining a free and open market in the 
stock on the Exchange by lending any amount of stock desired with- 
out premium. Later the Exchange was notified that the advertising 
campaign to sell the stock outside the Exchange which the company 
was conducting, would be discontinued. - But the next day Mr. Saun- 
ders suddenly called for delivery of his stock, which in turn precipi- 
tated the calling of all loans of the stock made previously by Mr. 
Saunders and his associates. The amount of stock involved far ex- 
ceeded all the stock in the market other than that held by Mr. Saun- 
ders and other directors of the company. The enforcement of con- 
tracts simultaneously for the return of stock in this way would have 
forced it to any price which might be fixed by Mr. Saunders, and 
competitive bidding for the insufficient market supply might have 
brought about an acute though temporary “corner.” The same day 
the Governing Committee accordingly adopted a resolution suspend- 
ing dealings-in the stock, pursuant to the provisions of the Exchange 
Constitution. Also, the Stock Clearing Corporation in accordance 
with its rules, suspended the delivery of the stock due at 2:15 the 
next day. Mr. Saunders offered to settle with the shorts for $100 
per share, and later raised this price to $1,000 per share. But a few 
days later, upon the date set by the Stock Clearing Corporation, all 
stock deliverable upon security balance orders was delivered prior to 
the settlement hour. Thus, the alleged “corner” was more psycho- 
logical than actual, and Mr. Saunders received all of the stock due 
him at prices which he contracted to pay for it. He had “cornered” 
merely the floating supply and not the outstanding issue, and when 
stock held out-of-town was, through the deferred delivery, permitted 
to come into the market, the “corner” rapidly broke down. Mean- 
while the Stock Exchange struck the stock from its list.