New York Stock Brokers: Austin M. Greer

AUSTIN M. GREER,

SEP

19

1898

NEW YORK. 

 detail of Greer's double-ring oval cancel

Austin Greer doesn't appear in King's Views of the New York Stock Exchange 1897-1898, the resource guide we've been using to help identify the brokers whose cancels appear on various 1898 revenues.  Happily his cancel is readily identifiable, an attractive double-ring oval, oddly punctuated with a comma after his name and period after New York.  The 20-cents in tax stamps used for the transaction properly pays the 2-cent per hundred dollar rate for the resale of 10 shares of stock whose original value was $100 per share.   

Perhaps Greer, at this time, simply was dealing under the auspices of  Charles M. Schott, Jr. who became a member of the NYSE in 1869 and whose name appears on the Greer memo.  Schott himself though apparently was still independently active as John previously blogged about a CHAS. M. SCHOTT, JR. & CO. cancel on a 40-cent battleship issue.  Perhaps someone more knowledgeable about NYSE transactions can explain the purpose of the "Account of C. M. SCHOTT, Jr." endorsement on the Greer sales memo or what relationship might have existed between Greer and Schott.  

The buyer, Boody, McLellan & Co.,  to whom Greer sold these 10 shares of Chicago, Burlington and Quincy Railroad stock, was a recognized NYSE member firm, adding further credence to Greer's acceptance "on the street" even if he was not then an NYSE member.        

Greer seems to have been in the brokerage business at least since the late 1880s, as a 1903 New York Times article refers to a fifteen year employee as embezzling funds from the firm.  Small wonder, as Greer reportedly often was absent from the firm's office for weeks at a time, leaving his employee to run the operation. The article makes no mention of Mr. Schott, so whatever relationship Greer had with him in 1898 may have been dissolved by 1903. 

New York Stock Brokers: Hatch & Foote

Hatch & Foote Stock Sale Memorandum

20 Shares Chicago, Burlington, and Quincy Railroad

H. & F.

JUL

15

1898

NEW YORK

Here's an example of one Wall Street brokerage selling stock to another Wall Street brokerage; Hatch & Foote to H. Knickerbocker & Co.  When resold stock was taxed on its original face value at the rate of 2-cents per $100 or fraction thereof and not on its actual resale price.  That the sale of the 20 shares of Chicago, Burlington, and Quincy stock sold here at $105.875 per share was taxed 40-cents indicates the shares were originally valued at $100 each when issued. 

That the transaction is dated July 18, 1898, while the dater cancel used on the stamps reads July 15, 1898, suggests the person in charge of taxing the company's sales memoranda wasn't careful about changing the date on his cancelling devise.   

    Charles B. Foote and David B. Hatch founded their business in 1867 as a banking and brokerage business.  Robert Gibson was the managing general partner of the limited partnership firm H. Knickerbocker &. Co.

Hatch served on the board of directors of several railroads over his career.  Below is a RN-G1 tax imprint check dated September 27, 1881 from the end of the civil war tax period issued by the Hatch and Foote firm on behalf of the Boston & New York Air Line Railroad  during a period when David Hatch served as its treasurer.

Hatch & Foote RN-G1 check for the

Boston & N.Y. Air Line R. R.

September 27, 1881

The firm also appears to have been active in the US bond market as evidenced by this 1879 postal card solicitation for the purchase of US Government 4% bonds and other bond transactions.  

          

1879 Hatch & Foote Bond Business solicitation

The firm failed to the tune of $2,000,000 and was suspended from the NY Stock Exchange in September 1900.  Hatch blamed Foote who he claimed was insane and had been speculating on both sides of the market without Hatch's knowledge, yet it was Hatch who had been executing the trades.  To read the New York Times' account of this strange debacle go here.   It's as interesting as reading about today's MF Global failure!    

New York Stock Brokers: Ladenburg, Thalmann & Co.

As John Langlois noted in his cancel of the day blog for May 3, 2010, Ladenburg, Thalmann & Co. was founded as a Wall Street securities firm in 1876 by American banker Ernst Thalmann and German banker Adolph Ladenburg. Thalmann maintained the seat on the New York Stock Exchange. Today the firm continues to operate with headquarters in Miami and offices in more than 10 other US cities.  And Ladenburg Thalmann Financial Services is part of the current Russell 3000 Index. 

On its face the broker memo below appears to be a straight forward purchase of 200 shares of Mobile & Ohio Railroad stock by Ladenburg, Thalmann.  Given the stock resale tax rate of 2cts/$100 in original share value, each share had an original value of $100.  That these 200 shares sold for just $48.50 per share, or $9,700, means there was a loss of $10,300 from the $20,000 original value.  But there's more to the story.

I've always enjoyed collecting on-document usages.  Documents provide an historical perspective that stamps alone cannot.  While these cancels provide the name of the firm and the date of the transaction, without the document we'd not have known that the stamps represented the tax on the sale of M&O Railroad stock at such a loss, and we'd further not have been able to speculate that Ladenburg, Thalmann likely turned a significant and immediate profit on this transaction.  And speculate, I believe, is what Thalmann was doing when he purchased these M&O shares.  

Stock Purchase Memo

Ladenburg, Thalmann & Co.

double-line, stamp-like boxed cancel

L. T. & Co./JAN/29/1901

Allowing us to speculate about Thalmann's M&O purchase was having access, via this blog, to a critical mass of M&O stock sales memos.  Earlier this year John blogged about six M&O stock sales memos dated between December 30, 1898 and February 1, 1901 documenting that the stock languished in the low 30s and 40s during 1899 and 1900 until February 1, 1901 when it spiked and sold for as much as $70.50 per share on news that the M&O had agreed to a stock swap offer with the more financially sound Southern Railroad.  So the 200 shares Thalmann purchased for $9,700 at $48.50 on  January 29, 1901 could have been sold for around $14,100, or a tidy profit of $4,400 just three days later! 

The name Johnstone doesn't appear in King's Views of the New York Stock Exchange so presumably the seller wasn't a recognized broker.  Was this simply a serendipidous purchase, or did Thalmann have knowledge of the pending stock swap and go looking for M&O stock in late January 1901?  We'll never know for sure.  Considering M&O had been trading in the 30s and low 40s for the past two years, Johnstone may have been pleased with, and perhaps also may have turned a profit when Thalmann bought at $48.50.  Clearly, documents and the information they provide can offer a sense of historical context and a glimpse into the cultural tapestry of this colorful era.  

All of this also serves to demonstate the great value of the 1898revenues blog and the synergy it creates, where information pooled from numerous sources and participants enhances our capability for understanding, not only the material we choose to collect, but also the socio-economics of the Spanish American War era.  Thank you John for having the foresight to start blogging about 1898 revenues and for all the time and energy you devote to it.

Here's a Ladenburg, Thalmann sales memo documenting the sale of 200 shares of the Southern Pacific Railroad to another New York broker, William B. Wadsworth.    

  

 Stock Sales Memo

circular cancel

Ladenburg, Thalmann & Co.

JUL/18/1901

Again, given the $4 tax, the initial value of these 200 shares was $20,000, so this sale represents a loss in value of $9,400 or nearly 50% from the initial value of the stock! 

Like the M&O, Southern Pacific shares had been selling in the 30s and 40s during 1900.  The speculation in railroad stocks in advance of the May 9, 1901 Wall Street Panic had run the SP's price up to $67 as of May 1, 1901.  Selling 10 weeks later for $53 represents a 20+% drop from that speculative high. 

Either Ladenburg, Thalmann had two NY offices, or it moved sometime between January 29, 1901 and July 18, 1901, as the purchase memo has them at 46 Wall Street, and the sales memo, a couple of blocks away at 25 Broad Street.  

Not surprising, given Adolph Ladenburg's European banking connections, the firm did business overseas.  The piece shown below is a clip from a foreign bill of exchange.   Enough of the bill remains to indicate it was written in Pounds Sterling so the transaction likely involved a British bank.  The handwritten date on the other side is Jan 25, 1901 so it would appear the year date on the circular cancel wasn't properly updated to 1901.  Assuming the bill was drawn as part of a "set" (the clip does bear the word "FIRST") the tax rate was 2cts/$100 in value.   The bill's value in dollars then had to be between $24,100 and $24,200.                

Clip from Ladenburg, Thalmann Bill of Exchange 

Unlike the stock memos where the Commerce issues were both cut and handstamp cancelled, the dollar Commerce issues used here, as well as the 80cent battleship, were perfin cancelled before being applied to the document. That suggests access to the stamps used for bills of exchange was open to a wider number of employees -- the main purpose of perfins being a security against internal theft. The perfin is most easily read on the enlarged 80 cent battleship issue shown below. 

perfin cancel:

L T Co

New York Stock Brokers: Martin & Co. + Watson & Brown

Martin & CO

APR 23 1901

A photo of Augustus Fitz-Randolph Martin, the founder of Martin & CO, doesn't appear in King's Views of the New York Stock Exchange. He died at age 55 on October 16, 1897, the year prior to its publication. According to his death notice in the New York Times, he became a member of the stock exchange in 1866. Although not listed in King's, the 1901 sales memorandum shown here indicates the firm continued after his death.

Affixed to the reverse is a nice plate block of nine of the $1 gray overprint Commerce issue with three more $1 singles affixed below the block; all are cut-cancelled and handstamped with a two-line company handstamp. Used plate blocks of any the Commerce issue can't be very common -- its presence on this document makes me wonder if the person who prepared this memorandum was a stamp collector.

At the resale rate of 2-cents per $100 in initial stock value, the $12 tax indicates each of the 600 shares had an initial value of $100, or a total value of $60,000. Realizing just $7,200 ($12 each) means there was a loss of $52,800 from the initial stock value!

Martin & CO memorandum for sale of 600 shares "Linseed"

to Watson and Brown

"Linseed" most likely refers to the American Linseed Company formed December 5, 1898 in New Jersey. Information about this company's early business is scant; it paid quarterly dividends until December 1900 when payments ceased. A 1909 New York Times article indicates after losing more than $1,400,000 in 1901, the company didn't provide any annual reports until 1909. That huge loss perhaps explains the low stock price.


The company's failure to provide annual reports perhaps is explained by the fact that John D. Rockefeller and Standard Oil took control of it in 1901 as reported by the New York Times on April 25, 1901, just 2 days after this sale occurred. Hmmm! If documents could talk we'd likely get some interesting insider information! As indicated by this 1915 New York Times article, Rockefeller held the company close, controlling its Board and funding it whenever necessary, but otherwise not paying dividends.


Fast forwarding to today, we find Bestfoods, one of the largest food companies in the United States, (think Hellman's Mayonnaise and Skippy Peanut Butter), traces its roots back to American Linseed. It's a long history that includes a 1913 Sherman Antitrust Suit (shades of Rockefeller's Standard Oil situation).


It's unclear if Watson & Brown, the brokers who bought these 600 shares of American Linseed for such a low price on April 23, 1901, had knowledge of Rockefeller's pending takeover of the company or if they subsequently profited from the purchase, but the timing certainly suggests that possibility.

New York Stock Brokers: Sharp & Bryan

It's been more than 3 months since my last submission to 1898revenues; a longer hiatus than planned. While I look forward to continuing to explore the application of the war tax law by blogging more about on-document usages of the 1898 revenues, I must say I've enjoyed the current series about New York Stock broker cancels.

Those blogs demonstrate the breath of opportunities 1898 revenue stamps offer collectors. Kudos to Dave Thompson and John Langlois for pursuing them. As a way of segueing into blogging about on-documents usages again, I thought I'd appropriate show and discuss some actual sales memoranda from some New York stock brokers.

Sharp & Bryan Stock Sale Memorandum

2500 Shares Union Pacific Railroad Stock

New York, NY April 26, 1901

Reverse of Sharp & Bryan Memorandum

Here's a sales memorandum for the resale of 2,500 shares of the Union Pacific Railroad stock properly taxed $50 with sixteen $3 and one $2 gray Commerce overprint issues (eight of the $3 stamps are on the reverse). The tax rate for the resale of stock was 2 cents per $100 of original stock value, so the $50 tax indicates that each of the 2,500 shares sold here for $108 had an initial value of $100. So the total value of this transaction was $270,000!

That Sharp & Bryan used lower dollar-value documentaries to pay the tax suggests this may have been an unusually large transaction for them. It also suggests they didn't stock, no pun intended, high value stamps, an expensive proposition for any company.

Whoever prepared this memorandum went to great lengths to keep the information about the sale unobstructed. First they encircling the critical information on the form with $26 in tax stamps, putting the remaining $24 in tax on the reverse.

All the stamps are both punch and handstamp cancelled. The stamps on the front of the document were affixed, then handstamped, and then punched. One can ascertain this by noting that the punches cut through the handstamp cancels, the stamps, AND the document itself. Note that each stamp is punched 3 times in an irregular pattern, suggesting each punch was done separately.

The sequence for the stamps on the reverse was different. Each stamp was affixed to the document separately but only after FIRST being punch cancelled. Unlike the stamps on the front the punch cancels ALL appear to be in a regular pattern suggesting that the eight indivdual stamps were "stacked up" then punched. Why? Again, whoever produced this memorandum seemed to be trying to insure that the information about it wasn't obliterated which might have occurred had the stamps been punch cancelled after being affixed.

I only noticed this when looking for the best cancel to illustrate as a detail. As the arrow in the illustration below shows, unlike the stamps on the front, the handstamp cancel was applied only after they were both punched and then affixed to the document because the holes in the stamps on the back don't cut through the document and the handstamp cancel shows in the area of the holes; note the "R" in "APR".

The stock market panic of 1901 took place on May 17, 1901, just 3 weeks after this sale. The speculative antics of Union Pacific's chairman E. H. Harriman and others interested in gaining control of the Northern Pacific Railroad reportedly caused that panic. Perhaps this April 26, 1901 sale representing $270,000 was part of the pre-panic speculation which involved the stocks of many railroads including the Union Pacific. That Sharp & Bryan had a "Union Pac." handstamp cancel suggests they actively traded the stock and may have had a folder of pre-handstamped forms ready for Union Pacific sales. Assuming there hadn't been a prior resale, the seller made $20,000 over stock's $250,000 face value, a tidy sum in 1901!

Sharp & Bryan

APR

26

1901

New York

The Sharp & Bryan firm was established in 1891. They were forced to suspend trading temporarily in August 1903; however they apparently recovered as I found an additional 1907 reference to the firm.