Rescuer Brown

In the bare, new offices of Fox Securities Corp., No. 729 Seventh Ave., Manhattan, sat last week Banker David Abraham Brown and discussed the financial difficulties of his great & good friend William Fox. Banker Brown is Chairman of the Broadway National Bank & Trust Co. He is best known as a fund-raiser for worthy Jewish causes, most recently as Chairman of the Palestine Emergency Relief fund. Henry Ford, onetime Jew-baiter, is his good friend, and was one of 2,000 guests at a testimonial dinner given when Banker Brown moved from Detroit to Manhattan (TIME, June 3). For 17 years Mr. Fox has contributed liberally to Mr. Brown's charities. Last week Mr. Brown grasped the opportunity to return past favors by taking the leading part in an effort to raise funds for Mr. Fox.

Fox Securities Corp., newly founded, was the medium of the efforts and Banker Brown became F. S. C. president. F. S. C. announced it would issue $35,000,000 in 7% three-year gold notes. Offered to 15,000 Fox stockholders, 25,000 Fox employes, 15,000 theatre-owners served by the Fox organization, and to the general public, the issue if successfully sold, would enable Mr. Fox to pay off the largest and most pressing of his current obligations. First-to-be-satisfied creditors would probably be Halsey, Stuart & Co. ($12,000,000), then American Telephone & Telegraph Co. ($15,000,000).

It appeared also certain that payment of the Halsey, Stuart note would mark the end of a long connection between Mr. Fox and that Manhattan banking house. Indeed, Fox sympathizers seemed to regard Halsey, Stuart as playing somewhat the traditional role of the hard-hearted mortgage forecloser. In December Mr. Fox was said to have agreed to the formation of a voting trust (one Fox vote, one A. T. & T. vote, one Halsey, Stuart vote) to manage Fox affairs (TIME, Dec. 16). In January the agreement had become a disagreement, with Mr. Fox refusing to hand over immediate control to his fellow trustees (TIME, Jan. 13). Last week's formation of Fox Securities Corp. was universally considered as an attempt to shake off the banking hold, to supplant the voting trust, to leave Mr. Fox refinanced and free. Though $35,000,000 represented only a portion of the Fox indebtedness, Fox-friendly Banker Brown felt confident that the raising of this sum would restore confidence in the Fox financial structure, persuade other Fox creditors to wait patiently for their money.

Response to the Fox Securities Corp. issue was, according to Mr. Brown, "instant and gratifying." Said he: "Our telephone lines at the bank have been, clogged all day with inquiries . . . many potential investors have called in person. . . . It should be emphasized that the plan is substantially, the same as that resorted to by Henry Ford when he sought financial assistance from his customers and employes, and, as Mr. Ford did, I am confident that we will prove that Wall St. hasn't got all the money awaiting investment."

Meanwhile from Halsey, Stuart, from A. T. & T. came an unbroken silence.

Not silent, however, was Attorney Stanley M. Lazarus, who promptly made good his previous threat of asking for a receivership. Charging that "mismanagement and maladministration" had resulted in "serious and threatening financial difficulties," Mr. Lazarus lamented the fact that Mr. Fox holds voting control, fixed the adjective "socalled" upon the directors. To these claims Fox Attorney Samuel Untermyer declared the action was brought by "a handful of stockholders" and that the corporation was "overwhelmingly solvent."

Not sharing Mr. Untermyer's confidence however was Stockholder Mrs. Susie Dryden Kuser who owns 11,150 shares of Class B voting stock, and controls 8,000 in the estate of her husband, . New Jersey's late famed Anthony R. Kuser, bird-lover and Beebe-backer. Petitioning both for a receiver and an injunction restraining Fox officers from paying either Mr. Fox or his family funds of any kind, she made bitter accusations. Chief of these: Cineman Fox bought $440,000 shares of Loew's at $225 when the market was $70; bought a $19,000,000 string of theatres in England without seeing them; spent all his time watching quotations, speculating with his company's money, neglecting its affairs.

This file is automatically generated by a robot program, so reader's discretion is required.