Democratic messenger., 1881-11-12
STOCK " "CORNERS."
What They Are and How They Are
Made.

What They Are and How They Are
Made.
About the middle of September last
there was great ''corner" in the COM
mon stock of the Hannibal and st. Jo-
seph Railroad Company. In order to
explain to those who do not understand
the methods of stock speculation what a
corner is. we will give briefly the history
of this stock.
There are about ninety-two thousand
shares of the common stock OF what is
known as the ''St. Joe road" No divi-
dend has been earned upon it for many
years. At the beginning of 1879, the
shares were selling for less than fourteen
per cent. At one time in 1879 they rose
to forty-two per cent. During 1880
they never rose bat once above fifty per
cent.
A fresh advance has taken place this
year, steadily maintained each month,
until in August the stock touched ninety
eight dollars share. Meanwhile the
actual value of the road and of the stock
had not increased, for the earnings of
the road up to the middle of August
were actually less by one hundred thou
sand dollars than they were in the cor
responding time in 1880.
The advance, therefore, was based
upon speculation only. Those who
were interested in advancing the price
the "bulls," as they are called in stock
spectators parlance-bought all that
was offered. But at the same time the
"bears," who did not believe in its
value, and felt certain that it would de-
cline, were actively ''selling short"
A person who sells 'short" merely
sells what he has not. He borrows stock
to deliver to the person who buys from
him; and trusts to the future for such a
decline in the price as will enable him to
buy stock for less than the price at which
he sold, and return what he has borrowed
at a profit. Such buying is called
covering short sales.''
But in this case the ''shorts" were in
duced to sell too much. The "bull
party" owned the most of the stock, and
what they did not own was not for sale.
The shorts were believed to have bor-
rowed and sold about forty thousand
shares, or almost one-half of the entire
amount of the stock. And what was
worse, the stock had been borrowed of
the very men who owned the most OF it.
When the plans of the bulls were COM
plete, they began to call upon the shorts
to return what they had borrowed. The
shorts went into the market to buy, and
found the bulls bidding against them.
The price was run mp one afternoon from
about ninety-five to one hundred and
thirty-five. The next day it was put up
to two hundred dollars share.
Thus the shorts were cornered. They
had agreed to deliver stock which they
could get only at an exorbitant price,
and not much at any price. They were
completely at the mercy of the bulls.
Some of them saw their dilemma and
made such settlements as they could at
once.
Others threatened and even began
legal proceedings that the courts might
protect them from the consequences of
their own folly. But in the end all the
shorts settled their accounts, some of
them having been forced to draw their
checks for fabulous amounts.
This was one of the most remarkable
corners ever engineered in Wall Street.
It was also one of the most disgraceful,
the proceedings on both sides being
characterized by falsehood, intrigue and
heartlessness. About the same time
there was q grain corner in Chicago.
There was also cotton corner In Liver
pool that gave the chief cornerer profit
of probably two million dollars.
It is such gambling speculations as
these that justly give bad name to
Wall Street. There is as much reason
and as little evil in trading legitimately
in stocks as there is buying or selling
-four or shoes. But when people are
liable to be caught In traps if they buy
or sell upon their judgment, the case is
very different.
The people who are injured by huc-
tuations in price caused wholly by in
fuences outside of the value of the thing
dealt in, have a grievance. The outside
public has greater cause of complaint.
ALI markets are demoralized by such
transactions. The tone of public NOR
ality is lowered. And worst of all, the
offence goes unpunished.
The men who work all this evil profit
by it, and fill their capacious pockets
with the spoils, which no law can take
away from them; and this reward of their
rapacity enables them to make larger
the plumber they are to obtain from their
next thievish operation. - Youths
Companion.