Real Lace (22 page)

But Ryan was not ready to capitulate; indeed, he could not. Too much was at stake now. He decided to ignore the Law Committee's announcement, and simply sent word that he was still willing to negotiate on the price of the stock the short sellers owed him, and that he expected Stutz to be promptly relisted. The Stock Exchange loftily left this message unanswered.

With things at a standstill, lawyers began to enter the picture. The Exchange engaged none other than the august Mr. Charles Evans Hughes, who had narrowly missed being elected President of the United States four years earlier. Ryan obtained the services of a lesser-known firm called Stanchneld and Levy. Then he made a strong move: he tendered his resignation to the Stock Exchange, saying, “So long as your body is responsible only to itself, and so long as you can make your own rules and regulations for their immediate execution … I cannot with self-respect continue as a member.” This put the Exchange in a serious spot. Once out of the Exchange, Ryan was no longer bound by Exchange rules, and could name the names of the short sellers and otherwise tell all; the secrecy code no longer bound him. And, that evening, he did name names, to a reporter on the New York
World
. Those named
immediately issued shrill denials, but there was talk in the press of the urgent need to establish some sort of government investigative or regulatory force to look into the operations of the Exchange, “a development that many earnest friends of the Stock Exchange are extremely anxious to avoid,” which was putting it mildly. Ryan announced that he agreed a government commission should be established, which heaped insult upon insult. The Exchange was then made even more nervous when, in a rare interview, Thomas Fortune Ryan announced to the
World
that he “admired the fighting spirit of his son and would back him in his controversy to the limit of his resources.” This was indeed bad news for the Exchange, which had been counting on the family feud to keep the senior Ryan out of things. If Thomas Fortune Ryan's wealth and power were brought fully to his son's aid, there was no telling the outcome. Allan Ryan seemed to be inching into front position again. It began to seem that, David-like, he would succeed in felling his Goliath.

To support its position, the Stock Exchange issued an edgy and self-praising statement, taking the stand that everything it was doing was, as always, in the public interest. “There is not a word of truth in the statement that the action [the delisting of Stutz] was dictated by a desire to benefit the short interests,” the Exchange announced. “The members of the Governing Committee of the Exchange are firmly convinced that in all actions taken in respect to Stutz Motor stock they have been guided solely by a sense of their duty to the best interests of the Exchange and the public.”

Ryan's next move was to call back the Stutz stock he had loaned. Obviously, no stock would come back, since he had already bought it all from the borrowers, but this move permitted him, under Exchange rules, to “buy it in”—in other words, to buy the stock from himself on behalf of those who owed it to him, at whatever price he chose to place on it, and to bill the borrowers for the cost.
This he proposed to do on the morning of April 24, at ten o'clock, on the outdoor Curb Exchange on Broad Street. As for the price he intended to place on his stock, Mr. Ryan would not say, but, if he succeeded with this complicated tactic, it would mean that he had bested the short sellers. In the meantime, the Stutz Affair had become one of the liveliest topics of the financial community, and excitement mounted as the date approached. Would plucky little Allan Ryan really be able to bring some of the mightiest titans of Wall Street to their knees? Even those closest to the titans themselves could not help but relish the thought that he just might. Watching the mighty fall can be fun.

On the morning of the twenty-fourth, clerks up and down Broad Street jockeyed for positions at office windows to watch the proceedings that were due to take place on the street below. When ten o'clock came and went, and nothing happened, the street buzzed with rumors. What had taken place, it turned out, was that a delegation of the Stock Exchange Protective Committee had arrived at Ryan's office at exactly nine-forty. “Did you wish to see anyone?” the receptionist asked. Yes, they did: Mr. Allan Ryan. The committee was ushered into Mr. Ryan's office. They had met, they explained, and each man on the committee had written on a slip of paper a suggested price per share for Stutz to pay back Ryan what was owed him. The figures had been added up, and an average computed. It came to $550. Would Mr. Ryan accept that? Yes, he replied promptly, he would, and all shook hands. Ryan, it seemed, had won. True, he had not got the prices of $750 and $1,000 a share he had originally asked, but he had made a million and a half dollars on his corner, and he was the sole owner of Stutz. “The Stutz matter is settled,” the Exchange announced stiffly. “The settlement price is $550. The Stutz controversy is ended.” The Stock Exchange retired to its tent to nurse its wounds.

But it wasn't ended—not quite. Allan Ryan had borrowed tens of millions of dollars to wage his fight, and now the banks and
friends that had lent him money were pressing for repayment. Also, the battle had earned him bitter and powerful enemies who were now determined to have their revenge. He might appear to be victorious, but he was still the son of an Irish upstart, and there were those of the Establishment who were never going to let him forget it. When he had resigned from the Exchange, he had expected to receive about $100,000 in payment for his seat. Now this money was being held up on some mysterious technicality or other. Then, in June, the Exchange announced that it had not, in fact, accepted Ryan's resignation; instead, it was considering expelling him, and for “misconduct.” The Exchange invited Ryan to a hearing on the matter to determine whether or not he had been “guilty of conduct inconsistent with just and equitable principles of trade.” Ryan announced that he would not attend such a hearing. In the defendant's absence, the hearing, which lasted five hours, reached a verdict: guilty as charged. The punishment was expulsion from the Exchange, from which he had resigned some months earlier. Learning of the verdict in his office, Ryan said, “It is immaterial to me, and really I do not give a damn.” He slammed on his hat and departed for the racetrack at Jamaica.

There were other things, however, that he was required to give a damn about—the banks, for instance, who were increasing their pressure on him to get their money back. And suddenly, in midsummer, a number of other companies in which he was known to have invested heavily suffered sharp and inexplicable losses on the Big Board. His Stromberg Carburetor fell, as did his Hayden Chemical, his Chicago Pneumatic Tool, and his Continental Candy. It seemed more than an unfortunate coincidence that only the stocks in which he had held an interest were suddenly performing poorly; the wolves of Wall Street were after him again. Then, to add to his woes, there was a general collapse of the national economy, and stocks began falling across a broad front. By the end of 1920 stocks generally had gone down a full one-third
from their April prices. Then the insidious rumors, by which alone a financier could be killed, started. “I hear Ryan is bust,” one would hear across a table at the Stock Exchange Luncheon Club. One story circulated that Allan Ryan owed the banks fourteen million dollars that he couldn't pay. “The banks have got Ryan” became the word, while the Stock Exchange rubbed its hands and waited for the banks to finish him off.

In August, Allan Ryan instituted a one-million-dollar suit against the Stock Exchange, declaring that his honor had been sullied by the “verdict” at his “trial.” The suit, however, was as much a serious attempt to raise money as it was to clear his name. The Exchange had still not paid him for his seat, and the matter languished “in committee.” The banks, meanwhile, approached Thomas Fortune Ryan in the matter of his son's indebtedness. The senior Ryan replied, through an aide, that, after all, the banks had loaned money to his son, not to him, and he showed no further inclination to help Allan out.

Allan Ryan launched a heated attack against banks and their loan policies, and the banks responded to this with a certain amount of pique. They had supposed Allan Ryan would be
grateful
for all they had done for him. “Why, I could never conceive that a man could be so mean!” declared the president of Chase, indicating that Allan Ryan, if he had ever had one, had lost his friend there. Not only to win political friends but also to help create, in the community, an impression that things were not as bad as they were, Allan Ryan made a well-publicized gift to the Democratic National Committee of $40,000. But nothing seemed to work. On July 21, 1922, he filed a bankruptcy petition listing debts of $32,435,477 against assets of only $643,533.

Perhaps nothing exposes a man more pathetically to public scrutiny than bankruptcy—particularly the bankruptcy of a man who has long been considered rich. There, for the readers of the daily tabloids to see and enjoy, were all the sad and telling details
of Allan Ryan's financial and private life. He owed, among other things, $60.36 to the Buckley School for his son's tuition. He owed $207.80 to the Plaza Hotel for theater tickets. Best & Company wanted $157.75 for children's clothing, and Black, Starr & Frost had him down for $3,260.25 for jewelry for his wife. He owed the Montauk Club of Brooklyn $13.75 for dues, E. P. Dutton & Company $134.08 for books and stationery, Charles & Company $768.68 for groceries. Among the more impressive debts were $66,000 to T. Coleman du Pont of Wilmington, $8.66 million to the Guaranty Trust and $3.5 million to the Chase Bank. His old friend Schwab, who had stuck by him, had him down for only $300,000. Ryan had either paid back, or Schwab had forgiven him, the balance of the million Schwab had loaned him.

One hope for a way out of this morass lay in his Stutz stock—135,000 shares of which he had put up for collateral. If he could realize at least $50 a share on this, his lawyers figured, he might escape total ruin. But Stutz, which had been around $100 at the beginning of Allan Ryan's fight, had tumbled as a result of it to as low as $5 by the middle of 1921. When the stock went up for auction on August 2, 1922, the highest any bidder would go was $20 a share, and the $3,700,000 realized from the sale was barely enough to pay off one of the smaller of the big bank loans. The bidder, it turned out, was acting as an agent for Charles M. Schwab. It was apparently the best Schwab could do for his friend. With his purchase, of course, Schwab became the head of Stutz.

Allan Ryan's father would be seventy-one in October, and might be expected to leave him something in his will. But Thomas Fortune Ryan did not die for six more years, and when he did die, in November, 1928, his estate of $135 million was divided into fifty-four parts. Twelve each went to his widow and two of his surviving sons, John Barry Ryan and Clendenin Ryan, eight went to Allan's six children, and five to the children of his two deceased
sons. There were no bequests for charity “for the reason that in my lifetime I have contributed largely to religious, charitable and educational causes.” He added a codicil which stated that if any of his bequests were questioned, or if anyone in the family complained about his or her share, he or she would lose that share.

His son Allan's name was mentioned only twice in Thomas Fortune Ryan's will. Allan was given a third option, if two other survivors didn't want it, to purchase any object he wished from the deceased's art and sculpture collection—Allan could not by then have scraped enough money together for one of his father's Rodin busts. The will also stated, “I give and bequeath my white pearl shirt studs to my son Allan A. Ryan.”

The Ryan family today insists that the old man's will was not intended to be rancorous or vindictive—merely practical. Any money he had left to his eldest son would simply have been gobbled up by creditors. It would have been like flushing money down a drain. They are probably right.

Allan Ryan's daughter Miriam still has Grandpa Ryan's studs.

Chapter 15

THE TROUBLES OF ONE HOUSE

Few rich Irish-American families have endured more second-generation problems than the Ryans. One thinks of the Kennedys, but consider the House of Ryan. One is reminded of the doomed Greek House of Atreus. Drink, divorce, multiple marriage, and lapsing from the Catholic Church are only a few of the furies that have beset the heirs of Thomas Fortune. After Allan Ryan's bankruptcy, Charles M. Schwab was asked whether he thought there was a chance that Allan might get back on his feet. Schwab replied, “I hope he does—I think he will.” But he never did, and after his father's death his two brothers, John Barry and Clendenin, got together and agreed to share in an allowance for their brother of $50,000 a year. On this he was required to live.

Nor did bankruptcy end his woes. In 1922 Allan Ryan had a court battle with a man named George Maxwell, president of the American Society of Composers, Authors, and Publishers, over the
affections of the latter's wife, the former Sally Tuck of Philadelphia. Allan Ryan and his wife were divorced in 1925, and that same year he married a girl from Montreal named Irene McKenna. In 1933 he was unsuccessfully sued for $100,000 by his housemaid, on whom, or so she claimed, he had forced his attentions. Allan Ryan died quietly in 1940.

His children, by contrast, did fairly well, even though they received a smaller share of Grandpa Ryan's estate. Two of Allan's sons, Allan, Jr. and Fortune Peter Ryan, joined Grandpa Ryan's Royal Typewriter Company, and did well, and a third son, Theodore, made a name for himself as a breeder of prize Black Angus cattle on his Connecticut farm, where he also became active in local politics. A fourth son, Barry, not only owned race horses but became celebrated as a trainer of them. But multiple marriages marked this generation too—led by Allan, Jr., who married no less than four times, all to society ladies. His first wife was the beautiful Janet Newbold (who later became Mrs. William Rhinelander Stewart and, later than that, dated Randolph Churchill). His second was Eleanor Barry (no kin), his third was Priscilla St. George, and his fourth was Grace Amory, to whom he is currently married.