Mower County transcript. [volume] (Lansing, Minn.) 1868-1915, 1869-10-21

twenty IuoUsiaAU AT uuiI, ~ 0uoutEu.
"Giye three-eiShths,' comes from another
source. ''Make it fifty and sold shouts
another. Done" cries the first voice
And 10 it goes on for an hour or more.
ECONOMY OF BREATH.
To render this Ineligible, it must he re-
membered that these dealers IN sterling
coin consider their words moro precious
than the money they buy and sell. They
never repeat tho full price they give or take,
but merely the fraction above tho unit, UNI
loss the raise makes a full cent. Thus if
the last rate WAS 13l. man Offering or ask
ing 'nn eighth" is understood to offer or
ask l31 is. So with a quarter, half, five
Fights or seven-eights. II the Inst price
was 1871 rs, and dealer wishes to advance
to 1872, he cries out, ''Thirty-two," or more
frequently only ''Two."
ORDER AND CONFUSION.
Notwithstanding the Babel all this sounds
like to IN outsider, everything il perfectly
Ineligible to the initiated, and tho officers
catch and record every transaction. At ev-
cry variance in the price the telegraph OPP
orators report, giving the time, rs we'll MS
the advance and deoline, and the informa-
ton is also flashed i1to all the brokers' and
bankers offices. Sometimes the price fluc-
tuates every. five minutes, and the greatest
excitement prevails producing q noise aud
confusion ofsvoicea perfectly bewildering
TO one unaccustomed % III, but .neverthe-
less everything il :ntelltgible:to the dealers
and officers and the records tellsthe whole
story. Il 49,.
tsQUAnIN0 ACCOUNTS.
; In the Exchange there are no settlements
81 80
deliver gold. Smith & Jones offer half a
L" Sold" Each enters note of the trans.
come binding contract between them,
enforceable by the rules of the body. AT
the close of the Exchange, the former goes
for the gold An the transactions of the
each dealer makes up statement of what
lie has bought or sold, or both, during the
day, the various prices given or received,
the value of each transaction in currency,
and the gross amount due to or from him
on the days operations. This statement,
accompanied by the tickets given and re-
ceived, is sent to the Gold Clearing House.
When all the statements are in, the officers
of the Clearing House compare one with
another md verify them. Then a balance
is struck between each dealer and all the
others, and the gross amount due to or from
each one is settled ut once, and in one pay
ments itle Clearing House distributing to
each creditor his total dues, and collecting
from each debtor his total indebtedness.
THE "LoNa" AND THE 'sHoRT" OF TIE NAT
TER.
Frequently dealers, tempted by tho high
price prevailing and the prospects Of de-
cline, sell more gold than they have got,
trusting to make up the deficiency when
the price falls. Such dealers are said to be
"selling Short" and ono who has SO sold is
'short" exactly the amount he has sold be
You'd what he actually has. On the con-
trary, the dealer who has gold Oh hand un.
sold is ''long." "Cash gold" is the real
coin, in contradistinction to suppositious
amount bought or sold, but which is neve,
expected to be delivered or received, but
merely tho difference between the price a,
the time the transaction was entered into
and at tho time Of delivery. Thus one
dealer sells 10000 at two O'clock to-day al
13l. The clearance takes place at noon to.
morrow, when the price may DO only 100.
The seller thus makes one cent on dollar,
and has claim against the purchaser foi
500 at the time of settlement. Or if the
price advances cent meantime he loses
$1OO.
'sMARaIEs.
A "margin" has the same significance in
gold, stock or produce TRANSACTIONS It is
simply certain percentage deposited to
cover fluctuations Thus broker who has
sold 100000 gold at soy 1876. is permitted
by the rules of the Exchange to demand q
margin from. the purchaser, should the
market be declining. until the gold can be
delivered and the contract contaminated.
If an outsider conceives desire to dabble
in gold or stocks. he must go to broker
and employ him to make the transactions.
We viii suppose that gold is selling at 13O
Mr.. John Smith thinks the price viii soon
advance, and that by buying now lie can
speedily make ~ good thing" He goes &c
a broker and orders him to buy, lot us sup
pose, $500, 900 at the market price, 100.
This gold will therefore cost $3.50, 600 in
currency. u. The broker before he will I'm.
dertakc the transaction, requires Mr.. Smith
to put up margin, that is, certain pei
cent. of this snm, 5, 10, Is or 20 per cent,
as the case.may be. Ga gold, 6 per cent, il
considered good margin. On stocks &c
and Is per cent. is frequently demanded
In the case supposed, Mr. Smith is called
upon to deposit with tho broker his certi
fled check for S32, 500, being per cent. on
tho currency value OF tho gold to DO bought.
This is the margin" on which he purclas
es half million Of gold. The broker makes
the purchase and pays for it in full. He
then takes the gold certificates he receive,
to bank and deposits them as collateral
for a loan to replace the money lie has in
vested in the operation.
GOLD UP.
If the market price of gold advances
Mr. Smith may remain tho nominal owner
Of $500, 900 gold as long rs he pleases. He
is ''long" to that amount. When he thinks
gold will advance no higher, he orders his
broker to sell. Tho broker sells, We will
suppose, ut 1876, and realizes $G75, 600 in
currency. With this sum he first pays his
loan Mt the bank, and receives back tho Ger.
tificates Then he deducts certain ne,
centage for his services in buying and sell.
ing, and interest on the full amount, lest
tho margin, for the time the gold was ..car.
ried," and pays to Mr.. Smith what Is left.
Smith receives back the $32, 200 he itlepOs.
tied as a "margin," with S25, 600 profits on
tho transaction, less tho brokers' commits
sion and interest.
& e GOLD DOWN.
Bit if, after tho purchase is made. the
market .1alls Off'"-that in, it the price OF
gold declino--tI:e. broker will Garry" the
gold only until The difference between the
purchase price and its deterioratcd value
shall amount 10 the sum deposited as q
'Inargii, less commission and interest,
when he: notifies Smith to deposit more
margin, II Smith fails to do this, the
broker proceeds to "scll him out" ut once.
That is, he soils the gold, pays his Dor.
rowed money, pockets his commission and
interest, and leives Smith out OF pocket
exactly s32, 500, = -, .
GOLD CERTiFICATEs.
In tho recent gigantic operations in gold,
OF course the reader understands Tint nd
shining metal was seen on tho street The
Gold Exchange Bank has TINT locked up il,
its vaults, or something clHe to represent
it. This bank, however, issued gold cor
tiiicaten on the demand of tho dealers.
That il, Brown & Johnson, on tho settle
mcnt OF days business ut the Clearing
House, which was this Gold Exchange Bank,
had $3.50, 900 in gold duo them. That
bank, ut their demand, would issne to
them Il certificate of deposit for that
amount III gold. Tint certificate was re-.
deemable by tho bunk in gold on demand,
and was therefore az good as gold. besides
being much moro convenient to handle and
carry about.
IOANINt1 COL u.
The clique thai created tho iato furoro
in tho market commenced operations long
before tho crisis cnme. They hnd been
purchasing gold for more than week al
prices running from 1872 to l35, at which
the bulk Of their purchasers were made
This gold they loaned M fast NJ they
bought it. requiring tho borroWors to nul