SENSATION IN WALL STREET

Evening Star, Issue 19024, 20 August 1925, Page 4

SENSATION IN WALL STREET

HUGE BUSINESS FAILURE A business failure of unusual magnitude was notified on the New York Stock Exchange on July 5, when Dean, Ojiativlia., and Co., a firm of brokers and' grain dealers, failed, with assets estimated at 35,000,000t10l and liabilities at 36,000,000d01. The immediate cause of the bankruptcy was the failure of the firm to find collateral demanded by Chicago banks. Dean, Onativia, and Co. had lodged as security 45,000 shares in the Rosenbaum Stock Corporation, at a valuation of 50dol a share, whereas the bank claimed tha£ these w*.re worth only sdol a share. The Rosenbaum Stock Corporation, it should bo stated, was a subsidiary of a co-operative marketing organisation known as the Grain Marketing Company. Under the laws of the State of Illinois it was necessary that 51 per cent, of the stock of this companybeing co-operative —had to bn sold by duly 1, and this had not been done. Although E. F. Rosenbaum and other promoters of the Grain Marketing Company announce that it'was designed to solve the problem of distributing farmers’ products without all the profits going to middlemen, and that farmers would save 3,000,000d0l annually by it, the farmers a.nd farm organisations did not take to the project. This fact and the approach of July 28, the end of its first year, when it was to pay 4,C00,000d0l to the leased companies, are said to have been ‘the chief reasons which led the Chicago bankers to decide that the collateral value of the Rosenbaum stock was only Sclol a share.