Business & Finance: Fox's Last Stand

On the New York Stock Exchange one morning last week, shares in Fox Film Corp. suddenly began churning feverishly, jumped from 22 to 25, from 25 to 30, to 34. To account for the move there was no definite news, only a rumor that 25 attorneys had gathered in the offices of Judge Frank J. Coleman, reached a compromise that would end the difficulties of Fox Film Corp., largest company in the amusement field (TIME, Jan. 13, 27). In one respect this rumor was true. After two hours of deliberation a plan had been reached by which a new trusteeship would be appointed to run the company. For trustees the attorneys had proposed those two Manhattan lawyers whose eminence has in the past been sufficient to make them Presidential candidates—Charles Evans Hughes and John William Davis. A third man was to represent either Halsey, Stuart & Co. or Lehman Bros, as Fox bankers.

But in another respect the rumor was false, for fine as the plan seemed, it still lacked Cineman Fox's approval.

Shortly after noon, William Fox, coat collar turned up, snap-brim hat bent down over his face, arrived to give his verdict, to choose between the new trusteeship or receivership. So momentous did he consider the occasion he let his photo be taken, for the first time in 15 years. Looking straight ahead, he hurried into the building, entered Judge Coleman's private office. The attorneys waited outside, hoping that this day would see an end to one of the greatest tangles of recent financial history. An hour and a half later the Fox answer came. Judge Coleman, alone, emerged from his office and said: "Mr. Fox says he will take his chance on a receivership. He will not agree to a voluntary trusteeship. He will not agree to retiring as an executive. . . ."

While Judge Coleman spoke, Cineman Fox's attorney, shrewd Samuel Untermyer, gasped and started toward the private office where his client was still closeted. "It's no use, Mr. Untermyer," broke in Judge Coleman. "You will only waste your time and the time of the rest of these gentlemen. Mr. Fox made it clear that this is his final decision. He said he would agree only to the appointment of trustees to be named by himself, of whom he would be one."

Thus dramatically, alone, did Cineman Fox make his last stand, refusing compromise, departing silently. On the Exchange, Fox Film dropped from 34 to 25½, ended the day at 27½ after a record turnover of 494,800 shares or much more than half the total outstanding (820,660 shares). To the public, his stockholders, and apparently even to his attorney, Cineman Fox's move was a surprise. Yet earlier in the week he had written a letter to stockholders which clearly showed the premise upon which he stood.

Speaking of the first trusteeship (TIME, Dec. 16), Mr. Fox wrote: "Willingly and gladly I agreed to this arrangement, feeling I would do the companies a great service and at the same time protect the interests of the stockholders.