Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1881-10-05
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A WALL STREET "CORNER.n

Did you hear about the corner in
Hannibal and st. Jo?' Yes; prettv
sharp turn on the bears wasn't it?'
They say the pool squeezed the
shorts to the tune Of from three to
four millions yes, but I'm glad the
squeeze was not on the lambs this
time
So much for talk in Wall Street vo-
cabulary overheard on the cars. What
does it mean Let US see if we,can
get lesson out of it. The corner in
Hannibal and St. Joseph railroad stock
referred to, which formed the most not
able eyept in the, transactions on
Change last week, was in plain Eng
lish this: During some months past
number of SPECTATORS began to buy up
the Hannibalsand ST Joseph stock,
which vas purchasable at about 60 or
lower. They bought until they owned
between them 10000 of the 100, 900
shares. Still the stock was offered in
the Market and as they had so nearly
all of it., it was evident that short sales
of it were being made, that is, specula-
tors who actually had no shares were
selling and becoming responsible just
as if they had them, trusting to chance
to buy when demanded, at less than
they had sold. This is what is called
selling short In this instance, the
buyers took all that was offered, until
they had bought 80, 900 more shares
thanwerc in existence. Then they had
what is known as corner and had
in it the bears who bad been selling
what they possessed only in name, not
in fact To squeeze these. .short-sel-
ling and short-sighted spectators it
was now only necessary to bid up the
price of the stock-which the buyers
could do by united action, since, they
owned it all-to such point as satisfied
their greed, and then call upon those
who had sold to deliver or settle. AS
the latter could not deliver without
buying at the POOLS price, they were
wholly at the mercy of the, stock own
ers, and had to settle on a basis of 200
share, the price having been run up
from 964 to 200 in two days. The re-
suit is said to be as above, that the
shorts were squeezed out of from
three to four millions of dollars. which
the several members of the pool divide
and put in their pockets. .f4
That is what the corner in Hanni-
bal and st. Joseph stands for, but that
is not all. 1t represents an iniquitous
system that is not legitimate business,
not legitimate dealing in actual values,
but gambling pure and simple. The
basis of this system is to turn nothing
into gold by sharp practice. The first
evil it discloses is the false operation
of selling a fictitious thing. The spec
ulator who sells Short does exactly in
kind what man would do who should
sell you a farm, present you the deed
in regular form, and when you asked
for possession according to agreement,
confess that he owned no farm. Sell
ing Short is false to the core, and one
of the greatest curses of Wall street
transactions. In this instance those
who tried the trick got caught, and
have had to pay roundly for it, as they
deserved to; but the evil remains, and
is only made more conspicuous. 1t is
something that is done every day, and
is a part of the speculative system.
But it is rank dishonesty all the same,
and ought to be done away with by
enactment strict enough to meet the
case as one of fraud.
Then, too, the action of the men
who bought. the stock and entered
into the combination or 'pooP-how is
that to be considered They have
made millions out of nothing, that is,
where no real value was represented
in the transaction. Have they earned
that money in any legitimate way!
Have they earned it any more square
ly and honestly than does the man
who sits down at the faro table with
an investment of SIS. and rises up with
a sum of 100000 won at gaming?
Worse even than that, what moral
distinction is there between such a
Squeezing of money out of man and
him on the highway and tax
ing it from him by violence The
corner as a transaction is foul and
rotten all the way through.
1t is well to inquire what the effect
of such operations must be upon the
more legitimate business of the Stock
Exchange. 1t cannot fail to react in
juriously upon all stocks. 1t may not
make so much difference to the people
at large whether the stock of Hannibal
and St Joseph goes up or down, or
that of some other railroad or silver
mine but it comes home to every man
when the same system of gambling is
carried into the dealings in grain and
pork-into the sale of those staples
whose dearness or cheapness are of so
vital consequence to millions. The
prosperity of the country is touched
then. And the presence of such a
commercial leprosy, recognized and
tolerated liz the community, is some
thing whose baneful effects be felt far
and wide in business. Such opera
tions as those involved in Wall street
corner ought not to be possible for q
man who hopes to maintain a reputa-
ton for commercial honor and integri-
ty.
The Prairie Farmer says: Weeds
on gravel walks may be destroyed and
prevented from growing again by
copious dressing of the cheapest salt.