Improper Indignity

Fortnight ago athletic A. G. Spalding & Bros, (recently recapitalized) listed its new no par first preferred stock on the New York Curb Exchange. Broker Edward Parry Sykes, 43, appointed specialist in the stock two days before, arrived late at work that morning. Maybe that contributed to his hard luck. There were no bids and no offers. So he made some quick calculations about what price to quote. Considering Spalding's balance sheet and the price of the old preferred, he decided to quote 30 bid, 33 offered (ten shares each way).

No sooner had the quotation gone over the ticker than an order came selling him ten shares at 30. He quoted again two points down and his bid was snatched at 28. He continued dropping his price, but like a hungry school of fish snatching at fat grubs, sellers snatched at his bids all the way down to 14. Then, fussed at playing sucker to his own game, he traded in and out at around 15 to stabilize his market. The bears let up. Broker Sykes's face was red. The traders knew, although he didn't, that Spalding's new preferred had been offered at 16 (when issued) in the over-the-counter market.

Last week unhappy Specialist Sykes, who trades in 24 (mostly inactive) stocks, went on an involuntary month's vacation, still long 70 shares of Spalding preferred, on whose total purchase price of $1,590 he was out some $500. Reason for his unexpected holiday was the prompt action of Curb President George Peters Rea in revoking his Exchange registration as a specialist for 30 days. Broker Sykes had, said President Rea, "subjected the Exchange to improper indignity by his inexcusable thoughtlessness."

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