The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1869-10-05

to own the gold. and competent to get II In
some way and deliver 1t at the appointed time,
they would have had no more right to sell the
gold than any boot-black, with only his days
earnings in his pocket, in the City Hall Park.
The sale was made; gold had to be delivered;
the sellers (the bears) had no gold.
They had first, to obtain theg0ld to deliver,
and thus make good their bagain and their
credit.
They had, second, to secure themselves
against loss of the one per cent. difference
between the price of gold on the day of agree
ment and the price they had agreed to deliver
it fors Or else they were, inevitably, losers by
the transaction.
The first thing the bears did, after selling
short in the way described, was to borrow the
gold wherewith to make good their deliveries.
This borrowing process was effected through
their brokers, with brokers representing the
parties having the gold to loan. The thing
that the gold market, under the influence OF
their short sales, would decline, so that they
could go and buy next day, or the day follow
ing that, an em0unt of gold equivalent to that
they had sold and borrowed for, say 1924 or
1873. If they could do this, they could return
their borrowed gold to the lenders and retain
O profit Of one-half or one per cent.
To the chagrin Of the bear operators, their
short sales failed to weaken the gold market.
So they had to renew their loans day after day,
and trust to the future. Weeks passed; they
continued their short sales and continued bor-
rowing, and still the market, although vacil-
lating and apparently weak, did not once de-
scend below the rate which existed when they
first began their operations.
They were disappointed, but still utterly
dazed and blind
They failed, all the while, to find out the fact
that the bull clique Of operators, with ten or
twelve millions Of gold in their possession,
were actually loaning them, through one set Of
brokers, the gold that they borrowed, and buy
ing back again, through another set Of brokers,
the gold that they sold
The bears at last became enraged. They
formed pool on Wednesday of last week to
sell $4,000, 900 of gold short. They sold it
short; and without their knowledge the bull
clique took nearly every dollar OF It. They
had to borrow the gold, and the bull clique
lent them nearly every dollar, receiving 1t
back again, Of course, on the day OF delivery,
through their brokers, who had bought it.
Still the market, thus entirely In the hands
of this tremendous clique Of bulls, would not
90 down in favor of the bears. On the con-
trary, the immense short sales Of Wednesday
disclosed to the bulls more fully than before
how completely the bears and all classes OF
spectators besides outside the bull-ring were
in their (the bulls) tolls.
They raised the1price of gold in the market.
This was terrible move. The dilemma OF
the bears was now desperate one. For we
must not omit to consider that the bears, who
had kept on borrowing over and over again the
gold necessary to make good their contracts,
had, some time or another, to buy the gold to
return finally 10 the lenders. Their hope and
endeavor had all along been to break the mar
ket down, buy the gold at reduced rate, and
thus make their profit. But, when the market
rose against them, imagine the CONSERVATION
I,n haI hui hot frna m QOo6
in short sales amounting to millions upon mill
lions
They made one more venture another snort
sale of five millions or more. Again the bulls
took IT, But when the bears went to borrow
the gold to make this last sale good, the bears
stopped lending; there was no gold.
This was on Friday.
to the Gold Room to buy gold, and get out Of
the whole business. Their necessities were
too well known. Up went the price, higher,
higher, higher. The tempest threatened to
sweep them all into bankruptcy.
Then it was that Secretary Boutwell,, the
tardy friend of these bears of the Loyal League,
came to the rescue with the promise of four mil
lions wherewith to relieve their needs. Then
it was that the fog and smoke descended upon
Wall street and its environs, which still makes
that region appear chaotic.
The bulls ran up gold too high-therefore.
so many failures resulting from the gold trans
actions. Many of the benighted bears who
rates on Friday, found themselves unable to
take it after ALL But the bull clique, notwlth-
standing their excessive avarice, are presumed
to have emerged better off than their victims.
The tightness of the money market which
resulted from this crash in gold was fol-
lowed by the panic in stocks. Men and firms
were compelled to realize money on railway
shares, which, when forced heavily upon the
market, suffered. The fictitious values OF
many Of them burst at once, and the real value
of others fell under suspicion, or were sacri-
feed from necessity.
The nominal depreciation of railway shares
above is estimated to be not less than TWO nun
dred millions.
The stock panic, far more than the gold
panic, affects business men and the rural
banks throughout the country: In cities slcn
as Buffalo and Cleveland, and in the cities
the West, merchants and banks
have lost heavily-even dlsastrously. The
banks here and in Philadelphia are not, 1t Is
believed, cramped as yet by the downfall Of
stocks and the great firms dealing In them. 1t
is the custom Of New York banks to protect
themselves by the retention oil heavy margin
loans on railway shares-margins which nave
constantly to be kept good, as such shares de-
cline. 1t is the keeping good these margins
which drains the resources OF dealers; ana
whenever house to which the loan Is grant
ed fails to keep good its margin the bank has
the privilege Of selling the collaterals forth
with for its own protection. The. price which
the securities thus bring, together with the
margins already in the banks possession, VIII
generally make good, or nearly good, the risk
which the bank has taken.
Still, there is yet room for doubt as to what
may befall.