The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1878-08-28

ITS Dishonest and DemoraIfzfBg Enecss
Upon Trade. "


a writer in the ST. Louis Republican says:
Chicago has become the governing market
in both grain and provisions made so by
reason of the whole world going there to
gamble in options, and we, as do all the mar
kets OF the country, change our quotations
as fast as they are changed in that place, re-
gardless OF any local demand or supply. 1t
is not as it once was, when all the markets
bad their effect on prices either in advanc-
ing or lowering them. 1t is not hard to
foretell that the effect of such q state of af-
fairs as this will be to ruin all legitimate
business in the line mentioned The method
oy which this species of gambling is car
red on and the means resorted TO
to depress or advance market
VIII be given for the purpose OF enlightening
your much puzzled German friend. We 4
must have ring, of course. We can't get
along these days in anything without one,
ana Chicsgo, not being more virtuous than
other cities is not without them. We will
say, for illustration, that Messrs Jones & Co.
are running the ''cofner." They are respec-
table commission merchants, and having
plenty TO back them undertake it. The OBJ
Ject OF this ring is to advance the price of
pork. IN which all the parties in this ring are
interested, holding more or less of that arti-
Gle. Messrs. Jones q Co. employ two brokers,
whom we will call A and B. Messrs J. & Co.
instruct Mr.. A that they wish to make a
large purchase of pork and that the commits
sions must be made to correspond, which is
agreed TO, and the price is fixed at two cents
per barrel. Mr. A is instructed for the day
that he must buy 10000 barrels of pork. to
buy as cheapIy as he can, and not to pay
over 81 advance on the then market price
(which we will say is loo per barely, should
1T be necessary TO do so in order to secure
that amount of pork. To the broker we
have designated as B, Messrs. Jones & Co.
give these instructions: 1--WE wish to sell
10000 barrels of pork. We wish, of course,
to get the best price for 1t you can. Sell this
amount in lots of 500 barrels, at the present
market price, advancing with each sale say
&C to lOc barrel as you may be able to sell"
At the close of the day these brokers go to
report to their principals. They are taken.
separately of course into the private office.
Mr.. A reports that he has followed his in
structions to the letter, and that he has
made the purchase of 10000 barrels
from Mr.. lone of the ring) through broker
b, and that the outside price paid was $11
per barrel. He leaves with instructions
TO call In the morning, when his instructions
for the day will be given. Broker calls to
make his report, and 1t is to the effect that
the order has been filed to the letter he
having succeeded in selling 10000 barrels of
pork, the outsids price obtained being sI1
per barrel. We then have this result of the
days operations: Messrs. Jones ~ Co. have
bought and sold 5000 barrels of pork and :
have succeeded in advancing the price of
pork 81 per barrel, at a cost only of $500 for
commissions, without really barrel of pork
being either bought or sold. Now this is Q
neat thing for the members of the
ring, for they had already been
preparing for this thing by the
quiet purchase Of pork before the arrange
ment with Messrs. Jones d Co. to advance
the price. As soon as the price begins to
show that some one is behind it, it needs no
brokers. Louisville, Cincinnati, st. Louis 4
and all the country become anxious to buy,
and the market is excited and higher; the
ring quietly unloads on them not only what
they own themselves, but they sell largely
short, and then the brokers are again called
in, but with different instructions. Broker
A is instructed to sell 10000 barrels of cash
or near future pork at the best price he can
get, and away the market goes with all
those who were so anxious before to help !.
it down. by offering their purchases ,
on the market These facts do
not seem sufficient to stop this kind
of trading. and we have no hope of that
being done so long as the parties engaged in
1t have money enough for margins; yet in
the meantime il is demOralizing all legiti-
mate trade. The banker, the grocer, the
hardware, the dry goods and all classes of
merchants are affected by it. More than.
one-half of the failures OF the past two years
have been owing to it and are directly tracea-
BILE to this cause. The country merchant is
unable to pay his debts to the city merchant,
from his losses on future grain or pork; so
the large number of defalcations occurring
have mostly been caused by losses on grain
and provisions bought or sold in Chicago or
elsewhere. Now, Mr.. Editor to your Ger
man friend we give this advice: The best
way to hedge is to build wal which
will keep out all persons who deal in OPP
tons. ..