South-eastern Independent. (McConnelsville, Ohio) 1871-1871, 1871-06-16
Financial Rings and COrnersz

I
: Financial Rings and Cornera
Q THE great majority Of people are, for
n tunately for themselves, unacqaainteC
; with the Vail street ways that are dark
II and tricks that are vain; fortunately, W,
say, because ruch knowledge is, as a gen
Y eral thing, SSlained only at considerable
d cost Outsiders read of this or that In
c dividual who has made a fortune in {
h few hours time, and they are strongly
t tempted TO take a chance in the golden
t wheel of fortune. For the benefit o
: those,ofs sour readers thus tempted, it NAV
Y be said that there is not one of thousand
!. yielding, whosdoes not live to repent hi:
4 folly. Generally speaking, the money
7 realized in the speculative maelstrOm Is
5 made by heavy capitalists combining and
I working in concert. Having put their
heads together and decided upon the rail
). troad 70 manipulate, they begin TO e work ,
I I the stock. Some of the officers of the
}, corporation, are generally embraced in the
4 ring. During the past ten years, many
I 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 :"
lit 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 'aflost. The conspiring directors
frequently withhold a semi-annual or
yearly dividend, representing that the re
iceipts have barely equaled, or fallen be-
How, the running expenses Day day
the road is talked down on Change, until
public confidence is seriously impaired,
and holders of the stock throw it upon
the market atalmOst any price. 49,
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 blustery 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 a new one, is declared. The
road is represented as being in the most
prosperous condition. Runors of con-
solidation0 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 di-
rectors. New carriages and steel rails are |
talked Of The air is suddenly filed 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. day. Then, when it has ad-
v8nced as far as the manipulators think
the circumstances will warrant, they begin
to UNLOAD upon the public. -q -
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 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 knowledge
OF this fact, that rings contrive, in the
we have described, to smiik 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.
spectators do not, however, have to buy
their stocks out and out, but can operate
ON ten per cent. margin. .its# ID ...fl Il
"Corners" are engineered in a similar
individuals of extensive means II
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 within twenty, thirty,
Or forty days, as the time. may be agreed
upon-the sellers thinking that the price
may, in the meanwhile, go down so that
they will be able to buy the stock in at a
less figure than they have agreed to de- {
liver at, ~ a7 II
When the market has been largely over
sold, the manipulators begin to call in
heir purchases. The sellers enter the Ex-
change to buy their stock for delivery, /
when they discover, to their great dismay, j
that none is to be had. A panic seizes |
hem. They rush wildly about to obtain (
he stock which is now jumping up at a
fearful rate, but it can be bought only of
the manipulators comprising the pool The
after are complete masters of the situation.
They hold on to the stock until it has
reached as high point as they deem it
;ate to carry il, and ,thencompromise with q
he unfortunate victims who sold what i
hey did not possess. By, holding on too t
Ong, the latter may be ruined so as to be
lnable to fill their contracts. G
, The Morris Canal stock was once {
Fought up on an average of between i
hirty and forty per cent. below par, and | I
r,,4I 20 fl,n.t fkF1o
ng 300 per cent. Manipulators purchased l
Harlem at l23, and compromised with the a
ellers on basis of 195. Some years later {
Harlem was bought by The Vanderbilt
robin pool at 40 and run up to 2S5. After i
he settlement, which realized three mil a
ions of dollars to John Tobin, John Nor
issey and others, and caused the ruin of 4
many first-class houses, the stock settled
lown to so. In one months time pool
orced Prarie du Chen from 60 up to 250, v
nd finally compromises with the Shorts" b
ii the way between 110 and 210. One '
ingle speculator paid $125, 900 to be let I
fl from his contracts. Rock Island was
dvanced from 167 to 149, and finally cor Y
lered at 140--1425 Hudson River was run a
% from 112 TO 1S0. Michigan Southern O
vas manipulated by pool in manner no 4
ess successful. The attempted ''cornero
n Milwaukee and ST. Paul, in Erie (1S6S) p
nd in gold Qs69) failed because the
projectors neglected to take into con-
liberation all the obstacles : to be a
yercome, and because the Erie "shorts a Z
escorted to the ruse of Issuing fresh stock 4
With which TO meet their obligations The 3
ouble sets of brokers are also employed in v
hese cornering operations, one advancing il
he price by purchasing IN loud manner, n
7hile the other unloads- For example, :
n that memorial "blsck Friday" Mr.. :
peyer, an Erie goId-ring broker was I,
ffering 1856 for gold in one corner of the O
oem- when it was being offered for 135 Il
q another corner, He. had received, as e
e has since said in court, his Instructions i,
D keep bidding the price up and he ad O
cred to his Instructions. q
From this brief glance at the manner in I n
Ihich stocks are engineered on Change, q
ur readers may understand. how extreme |,
y hazardois il is to touch any stock for r
peculative purposes. The quotations to- b
ay may no more represent the real value 2
f stock than did the figures represent .
he value of Prairie du Chen ON the Both y
f November 1865, which thirty days be- \
,re was quoted at 60, Whenever, there h
ire our readers hear of one individual i \