"ttv ".'-vwrn ,h' "" ;'i.. - ". vt ' " v -.. '. " : v, , I-.X ,V " -J : i ' 'w, .' I-,: ,:iit-jA,i -., i .w-" , - '- t mtr - r itHlA; 0?HtrtilAV, jyKE! 17, 1920 , vi " T at in.( w " i ALLAN RYAN'S ANSWER T I To the Board of Governors of the New York Stock Exchange and Whomsoever It May Concern: i. ii ,'Vi ; ''.,-'., L W - 'j -.-. ( -I. V, L ft , H'l 'H '; I -1 H il 'ri ' New York, June 16, 1920. "' v The motive and the underlying scheme of the invitation extended me to appear and stand trial by the Board of Gov ernors aro fully understood and appreciated. If I am not mis taken, this is the same Board of Governors who, last March and April, sat in judgment on the Stutz matter and on me ; tho same Board who, although fully apprised by me in advance of the crisis, still requested me to loan Stutz stock freely, but omitted to take any preventive measures "despite my repeated earnest requests ; tho same Board who secured from mo every detail respecting my operations) but declined to give me tho slightest information" ; the same Board who countenanced a per sistent "short" campaign, but accorded me only obstruction and difficulty ; the -same Board who first illegally suspended trad ing in the Stutz stock, and then later put through an amend ment to the constitution in order to acquire such authority ; the same Board who permitted its members to sell Stutz right up to the sound of the gong on the "Very day when it was about to make this illegal suspension, and then excused them from making- deliveries ; the same Board who very generously announced that my Stock Exchange contracts should have no Stock Ex change enforcement, but that I must be relegated to my chances either in the courts or by personal negotiation ; the same Board upon which sat during all this time some ten or more members themselves actually "short" or representing a "short" interest in Stutz ; and the same Board of Governors who thereupon in spired, fostered and approved the banding together of some fifty-eight firms, whose Stock Exchange contracts I held, for the avowed purpose of repudiation. Having entirely failed in the most persistent efforts to cripple me and in their deter mined purpose to protect gamblers in the stock, and having been frustrated in their attempts at repudiation, despite an array of eminent legal talent, and having delayed for two months the sale of my seat despite the fact that not a dollar's obligation stood against it, these same forces have now pre pared a fitting conclusion to the part they have played. This situation suggests the chances of an allied officer on trial before the German general staff. That at least might be an open proceeding. Ther.e perhaps the accused would have the right of counsel. While the result might conceivably be forecast, the evidence would at least be exposed to public view. But the trial designed by the Stock Exchange would extend to me no such privileges. Here I am asked merely to become the willing victim to a vengeful sacrifice. In order to make tho obsequies complete, they would like me to furnish the corpse. My answer is, first, that the New York Stock Exchange has no jurisdiction over me because I am no longer a membe'r, having duly resigned on April 13 last for reasons I then took pains to set forth ; second, that I deny there is any basis of truth in the charges made against me ; next, that if it be a violation of 'the Stock Exchange rules and regulations that one should render himself so obnoxious to the selfish clique in control that his expulsion is for them a matter devoutly to be wished, I make no denial of the imputation ; and last, as each and every member of the Exchange who has made it his business to investigate the Stutz matter must know by this time, I defended myself single-handedly from the most vicious assault on me and my stockholders ; I refused to be intimi dated by any person or combination of persons ; and not even -the great Stock Exchange can blot out the fact that its pro ceedings have been a disgrace to its honorable traditions and its fine ideals. ' No man appreciates more than I that the Stock Exchange is the keystone of the commercial structure of-this country. No man lias greater respect for its ideals and traditions. No man has a higher regard for those among its members who stand for justice and square dealing no matter whom it hurts. But no man deplores more than I that this great institution, with its limittess powers for good, should have so fallen that these powers are employed for the evil designs of private ends and personal vengeance. It is a sad spectacle, indeed, that a body boasting the high functions of a court should be debased to such low ends. When the so-called "charges" against me were" served, why was the judgment not simultaneously announced? It had already been. formulated, and by the same hands that made the charges. If anyone bJSeceived by the postponement of an nouncing this judgmepit must be only its authors. I have heard that the leopardmay change his spots, but I have never seen it done. Whitewashing the spots mayOmporarily con ceal them, but will hardly be sufficient to obliterate them. If the Board of Governors desires merely to prove that it claims the irresponsible power to expel me even after I have resigned, why need it go to all the trouble of a mock trial? If it desires to show that it is now antagonistic to me, ajid has been so all along, it had amply done so before fram ing these camouflage' charges. If it desires to demonstrate that the same forces which failed to crush me and to destroy my stockholders are still hungry for blood, it needs no further proof. But if the Exchange thinks that by the secret and des potic manipulations it can purge itself in the eyes of the public from tho taint of its mishandling of the Stutz matter, I am sufficiently American and optimistic to believe that tho thinking public will not be humbugged, and that somewhere and somehow the true facts will be brought to light, so that tho iniquity of this proceeding and the menace of this irre sponsible power in high places will appear in real colors. , I purpose to hold tho Board of Governors responsible, not only to tho public but to mo personally and to the Stutz Com pany and its stockholders, for all damages suffered through this campaign of persecution, and also for any danfage they may cause by this latest unconscionable proceeding which they have initiated. If they feel a shrcd"of responsibility to anyone but them Belvos, let them support their prepared judgment of expulsion as a court of justice sustains its judgments. Let them make specific findings of fact on the following questions: 1. Did I not appear repeatedly before their committee prior to March 31st, both at my suggestion and theirs? . 2. Did I not give them information showing the crisis in tho Stutz situation? 3.' Did I not, on these appearances, repeatedly request them to take tho matter in charge and deal with it equitably? 4. Did I not call their attention to the fact that there was por slstent "short" selling despite my endeavors to prevent It? 5. Did I not repeatedly request them to tako measures to stop this "short" selling? , 6. Did they themselves not request me to lend Stutz stock freely? 7. Did I not comply with their request and lend the stock up to the very last moment? 8. If on any of these frequent appearances I failed to satisfy their committees cither as to my good faith or as to my entire frank ness, why was I not then so informed and why wero no disciplinary measures then taken against me? 9. Were there not members' on the Board of Governors and tho Bub-committees who, cither for themselves or their customers, were then and continued to be "short" of Stutz stock? 10. Did I not actually hold tho unperformed "short" contracts of firms whoso members sat on the board and the committees? 11. Did not some of these very members sell Stutz stock up to the very last hour when trading was permitted ? 4 12. Did not these same committee members actually participate in the official conferences with me at the very time that they repr scntcd a "short" interest? 13. Didjiot certain of these members continue to sell Stutz, hav ing foreknowledge of the very action which they would recommend to the Board of Governors ? 14. Did not' these very members participate in the Governors' meeting when the suspension was declared? T ' 15. Was not this suspension declared without constitutional authority? 16. Did not the Board of Governors subsequently endeavor to put through an amendment to the constitution granting such authority for the future? 17. Did not the Board of Governors declare that no deliveries need be made upon Stutz sales made on tho last day of trading? 18. Did not tho Board of Governors officially declare, that there would bo no Stock Exchange enforcement of my Stock Exchange contracts ? 19. Do not the Exchange constitution and regulations entitle a member to official enforcement of his Exchango contracts ? 20. Did they not officially declare that I should bo relegated to my rights at law or private negotiation. 21. Since the Board of Governors havo circulated a pamphlet on the "Stutz Controversy," why did they not arbitrate this "Contro versy" when it was pending? 22. Cannot the Exchange compel arbitration between members even when one party thereto is unwilling? 23. Did not tho Board of Governors officially declare that It would take no part in tho "Controversy"? ; 24. Was not this action taken to avoid enforcing my contracts and to permit thcirepudiation? ' 25. Did not the action of the Board of Governors result in aiding and abetting the association of the Stutz "shorts" in their attempt to repudiate their contracts. ' 26. What single act, ruling or suggestion has there been on tho part of tho Board of Governors or any committee for my protection, or for the inviolability of these Stock Exchange obligations, or for my guidance? 27. What suggestion made by any Stock Exchange 'committoo have I failed to follow out, regardless of my own personal interest? ' 28. Did I not request tho Stock Exchange to use its machinery to settle the entire Stutz controversy? . 29. Did not the Stock Exchango officially direct mo to pursue my legal rights and make such settlement as I might deem proper? 30. Did I not declare that I would stand upon my legal rights, whatever they might be? 'r 31 Did I not yield to a settlement with the defaulting borrowers of stock only upon tho urgent request of their own committee? y 32. Were not the "short" interests ably represented by eminent counsel at tho time when they solicited and made a settlement with 1 me out of court? 33 Is thero a shred of evidence that I or my firm ever made a fictitious transaction in Stutz stock? 34. Is there any evidence that a single transaction of mine in Stutz stock, while its market price was advancing, was not an ab solutely bona fide transaction? p. 31J; by wor'' or deed nrnk "y fa'so representation to tho i Stutz Company hv order to induce a single member or his customer to sell a single share of Stutz stock? 86. Is there any evidence that I was not single-handedly nro- tecting my stock against persistent "short" attacks? r t i ail j1?3 !t becomo a Stock Exchango crime for a man who is Interested in a stock to protect it to tho limit of his resources against persistent, vicious Bhort attacks? t 38. How could I, as a largo stockholder of tho Stutz Company. havo protected my interests from assault in any other manner than r r by buying on the floor of tho Stock Exchange such of the Btock as was there offered freely for sale? ' 39. Was thero a single transaction in which I failed to mako payment for the stock which I bought? 40. Was there, from beginning to end, a single instance of any repudiation or attempt at evasion on my part on my contracts ? 41. Was thero a price at which- tho Exchango would have ap proved and commended a settlement? 42. If so, why did they not state openly ? 43. Did they not "have ample opportunity to have stated thi3 price before the settlement was made? 44. Did they ever state it or intimato it? 45. Is it possible, under the methods of tho Stock Exchange, for an individual, single handed, in the face of continued "short" selling, to manipulate a stock to a fictitious high prico in an open market? 46. Are not the net profits of the Stutz Company at the rate of over 83,000,000 a year? 47. Is it not the proper practice to, value stock, not, as attempted ' in tho charges, solely on the book value of it3 assets, but on its earn ing power and market value as well? r Each and every one of these findings is essential to any fair judgment on the charges. A truthful finding on these questions would not only exonerate me, but would put the blame where it belongs. . I have not heard of any charges being brought against a single one of the fifty-eight Stock Exchange firms who were "short" of Stutz stock when the Board of Governors benignly declared an illegal moratorium for their benefit. I blush at the impiied compliment that I, single-handedly, could so entrap the unwary as to send aloft a single stock to ten times its alleged actual value. I dare say that even among my enemies some will be found to assert that I could not all alone have accom plished this gigantic achievement. Surely that energetic committee, which had made suffi cient investigation up to March 31st to order a suspension in trading, and has since plied its efforts with such unceasing diligence in order to reach a conclusion which would justify charges, must have found in its careful research some traces at least of co-operation on the part of those fifty-eight "short" houses. But if this has been the case, they have carefully omitted to state it in any document which I have seen. They have been impartial enough to circulate a monograph styled a "presentation" which could hardly be called an exposition of my side of the matter. But here, too, there is, strangely, an absence of reference to any co-operation on the part of the "short" members at some stage of the Stutz matter. Indeed, far from being condemned or even criticized for their part in this assault upon my stock and upon me, these gentlemen who sold "short" are lifted to the inner circle of judges, with the supreme confidence that when I appear be fore them in person their resentments, their losses and the disgrace of their futile attempts at repudiation, all will be laid aside, and then at last, in the purity of their judicial preroga tive, they will mete out to me fair and impartial justice. Here is my answer to all of this : I want none of that style of justice; I have made this fight for a principle, and I intend to go through with it; when I resigned from the Stock Ex change I did so deliberately and for sufficient reasons then stated, and I adhere to my resignation and refuse to recede from it, even though the Board of Governors were to offer me in advance the testimonial of the whitewash which has been so carefully prepared for my adversaries. I shall fight the persistent efforts to depreciate the Stutz Company which have been translated by the Board of Gover nors even into their charges against me personally. Fortu nately, the business and standing of that company do not need the favor of the Exchange, but rest securely upon the good will of the American people. Fortunately, the public is not a stranger to what has gone on since March last. And fortunately for me yes, and even for the Exchange itself there is no longer a place in American institutions for a sur vival of the despotism and irresponsibility of czardom. Gentlemen of the Board of Governors, you may lay aside your pretenses. You need not wait until the 23d of June. You may tell the public now of the proscription which you have written for me, which awaits only my appearance for formal signature and summary execution. While I am not gifted with clairvoyance, I believe that I can read with accuracy a finding of "Guilty" to any charge that you, in your great solici tude for justice, may have prepared for me. If you will come out in the open and 'give me a public trial with the benefit of my own counsel, as you have yours, I will gladly appear before you even though your judges be every one of them short of Stutz, because I will present such a case that not even a partisan and. interested judge would dare find against me. But your invitation to appear in a star chamber and to join with you in placing a laurel wreath upon the past and present conduct of your committees and to furnish myself as the sacrificial lamb is respectfully declined. (Signed) ALLAN A. RYAN. iliilii'i'ii ,V'Ky : .Y.yrv.,. . ' , . ,,,., .;,., tocA&U., ......J 1 .ti;k kX ;.. ..r.r :i. 11 1 Vi Y A n M sJ r"M '.vi -iJ . , ft ; A n v j A ,$ ;,'' . 4 m
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