Iowa voter. [volume] (Knoxville, Iowa) 1867-1874, 1871-06-22
Financial Rings and Corners.

THE great majority of people are, for
tunately for themselves, unacquainted
with the Wall street ways that are dark,
and tricks that are vain; fortunately, we
say, because such knowledge is, as a gen
eral thing, obtained only at considerable
cost. Outsiders read of this or that in
dividual who has made fortune in a
few hours time, and they are strongly
tempted to take chance in the golden
wheel of fortune. For the benefit of
those of our readers thus tempted, it may
be said that there is not one of q thousand
yielding, who does not live to repent his
folly. Generally speaking, the money
realized in the speculative maelstrom is
made by heavy capitalists combining and
working in concert. Having put their
heads together and decided upon the rail
road to manipulate, they begin to "work
the stock. Some of the officers of the
corporation are generally embraced in the
ring During the past ten years, many
of the railroads of the country have been
conducted purely in the interest OF specu
lative managers If the aim of the ring
be to "bull" the stock, they first " bear !"
it in order to obtain as much as possible at
low rates. Various means are resorted to
for depressing it. Reports of one kind
and another, unfavorable to the road, are
set afioat. The conspiring directors
frequently withhold semi-annual or
yearly dividend, representing that the re-
ceipts have barely equaled, or fallen be-
low, the running expenses. Day after day
the road is talked down on Change, until
public confidence is seriously impaired,
and holders of the stock throw it upon
the market at almost any price.
Furthermore, the ring usually employ
two sets Of brokers, who are enjoined to
secrecy or are in the dark, and act en-
tirely independently Of each other. One
set sell the stock in the Exchange with
considerable buster, and keep hammering
it down from day to day, until, to use a
street phrase, the bottom drops out OF it.
All this time the other set are quietly
buying in the stock at the deprecated
figures
Having by these means obtained large
amount of stock, the ring begin the bull
ing process. The withheld dividend, to-
gether with new one, is declared. The
road is represented as being in the most
PROSPEROUS condition. Rumors Of con-
solidation or connections with great
through routes are put in circulation. To
give coloring to them, perhaps one or
more prominent managers or owners OF
other lines are added to the board of d.
rectors. New carriages and steel rails are
talked Of The air is suddenly filled with
all manner of reports favorable to the
road The stock halts in its downward
course and begins to rise rapidly; some
times Jumping up ten, fifteen, or twenty
per cent. a day. Then, when it has adj
vanced as far as the manipulators think
the circumstances will warrant, they begin
to UNLOAD upon the public.
Outsiders almost invariably purchase
stocks at the highest figures, and sell them
at the lowest When they see them rap
idly advancing, and hear them talked up
on all sides, it is quite natural that they
should try to take advantage OF the rise.
It is equally natural that they should
hasten to dispose Of their stocks when
they are weak and rapidly declining with
an apparent prospect of "going out Of
sight" 1t is by acting upon a knowledge
of this fact, that rings contrive, in the
manner we have described, to milk the
public, and realize enormous profits.
Nearly every leading railroad in the
United States has been manipulated after
this fashion during tie past ten years.
Large sums of money are needed. The
spectators do not, however, have to buy
their stocks out and out, but can operate
on q ten per cent margin.
"Corners" are engineered in similar
manner. Individuals of extensive means
combine and secretly buy on margin all,
or nearly all, the floating stock of some
railroad. They then, through brokers,
make enormous time purchases, amount
ing. in some instances, to twice or three
times the whole amount of stock. That
is to say, they purchase with the privilege
Of taking the stock witain twenty, thirty,