People's Pilot, Volume 3, Number 7, Rensselaer, Jasper County, 4 August 1893 — A CORNER COLLAPSES. [ARTICLE]

A CORNER COLLAPSES.

The Bit Pork Deal at Chicago Ends in a Crash—Six Firms, Including John Cudahy and A. W. Wright, FalL Chicago, Aug, 2.—Six big board of trade firms failed Tuesday. Pork fell from §19.25 to §10.50 in forty-five minutes after the opening bid was made, and panic reigned in the provision pit. The firms forced to the wall by the big bear movement were: John Cudahy, E. W. Bailey <fc Co., Wright <fc Haughey, A. Helmholz & Co., J. G. Steever & Co. and the North American Provision company. At least three of the firms were factors for Austin W. Wright, better known as “Charlie” Wright, the leading bull of the board. Intimately associated with him in the pork corner was John Cudahy and the two went down together, with the brokers who had been buying “long” for them. Efforts to learn the liabilities of the embarrassed firms were unavailing. They were all busy closing their books and could not tell even approximately. But there was no disposition in any quarter to conceal the fact that the firms were “hit hard” and out of the trading for the present, at least, though it was thought likely that they would be able to settle and resume business soon. One estimate places the amount involved in the crash at between §3,000,000 and §4,000,000. John Cudahy one year ago was rated at §4,000,000. A. W. Wright has had a varied fortune. Six months ago it is said he was worth §750,000. J. G. Steever, one of his brokers, said that his own failure would involve §250,000. The other concerns who acted for Wright are involved to a large extent. The cause of the failures was simply this —Wright and Cudahy were unable to get money enough to protect their margins and their brokers had nothing to do but to protect themselves by closing out the pending trades. The explanation offered was. that the brokers could get neither margins from the principals nor accommodation from the banks. Men on the inside, however, were inclined to believe<hat it was not so much want of accommodation as want of collateral or cash. Tuesday’s crash was the sequel of a brilliant deal in pork ribs run by Wright and Cudahy last autumn. The men cornered the supply and, it is said, made more than §3,000.000. They saw a chance to repeat the operation and plunged on September pork. In the words of one of the board operators: “Wright bought all the pork he could see and in his anxiety to get more ran the price up to §23 a barrel. lie kept on buying and the money market kept on getting tighter. When he got near the end of his string he stopped and Armour, who had been putting up on his calls right along, called on him for margins on trades. He could not get the money to protect his brokers and they closed his trades out.” When business closed Monday pork stood at §19.25. Yesterday morning it opened at §19.25, and the bulls tried to ease up a little at §l9. That offer was ignored, and some one bid §lB. Then bear brokers began to bid down by 25 cents, 50 cents and §1 a jump. In an instant there was a panic such as had not been seen in the pit since 1887. Everybody rushed in to sell out, and in threequarters of an hour pork was offered at §10.50. Lard fell from §9.75 to §5.90 a tierce.